“The Bank of Japan (8301) could add further stimulus if warranted by economic and price conditions, Deputy Governor Hirohide Yamaguchi said, while rejecting criticism of the impact of the bank’s policies on the yen.
“It could be the case that further accommodation will be pursued,” as the BOJ monitors the economy and prices, Yamaguchi, whose term ends in March, said in a speech in Nagasaki today. He later told reporters that the central bank’s policies aren’t aimed at directly weakening the yen.
The BOJ last week adopted a 2 percent inflation target without a deadline and said it would wait until 2014 to start open-ended asset purchases. Prime Minister Shinzo Abe today urged the bank to reach the target quickly, adding to his calls for more action that have helped weaken the yen more than 12 percent against the dollar in three months.
“This speech shows the BOJ is trying to escape from rising political pressure by signaling its willingness for more action,” said Hideo Kumano, chief economist at Dai-Ichi Life Research Institute in Tokyo and a former central bank official. “The BOJ may have to ease further in the next few months.”
European Central Bank governing council member Jens Weidmann warned this month against “politicizing” the yen exchange rate, and German Chancellor Angela Merkel said “I can’t say I’m completely free of worry when I look at Japan right now,” last week while speaking at the World Economic Forum in Davos.
