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TOKYO : Japan's central bank chief warned Sunday that the soaring yen was hurting Asia's largest economy and said he was looking at measures to cope with it.
The yen recently hit a 13-year high against the dollar after the US Federal Reserve cut interest rates to virtually zero. A strong yen makes Japanese exports less competitive and cuts into repatriated earnings.
"Amid the rapid downturn of the global economy, a strong yen has a negative impact on the (Japanese) economy," Bank of Japan governor Masaaki Shirakawa told public broadcaster NHK.
"The impact is big. So we, the central bank, would like to keep thinking of ways to cope with it, including through monetary policy," he said.
Shirakawa said the central bank will keep studying how it can lower private banks' lending rates and make it easier for companies to procure the money they need for investment.
But the bank has little room left to cut benchmark interest rates. On December 19, it slashed its key rate to 0.1 percent to cope with the worsening global slowdown.
The government has repeatedly hinted it could order the bank to intervene on the market to bring down the yen. Japan has not intervened on the foreign exchange market for nearly five years.
Some analysts doubt whether intervention would be effective, considering the market's negative view about the dollar in light of the woes in the US economy.
The yen last week slipped to about 92 to the dollar, down from its 13-year high in mid-December of 87 to the dollar. It was at 114 to the US currency one year ago.
- AFP/ir
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