Japan must fix 'misunderstanding' it is manipulating yen, says ex-BOJ chief Kuroda

By Leika Kihara

TOKYO (Reuters) - Japan indispensable hole "any misunderstanding" held by U.S. President Donald Trump that its cardinal slope was intentionally weakening the yen with monetary policy, erstwhile Bank of Japan Governor Haruhiko Kuroda said.

Trump said connected Monday helium had told Japan and China they could not proceed to trim the worth of their currencies, arsenic doing truthful would beryllium unfair to the United States.

Asked astir Trump's remark connected Friday night, Kuroda told a Japanese tv interviewer determination were limits to what Japan could bash to prop up the yen if the dollar were to emergence connected prospects of higher U.S. ostentation from Trump's planned tariffs.

"In fact, the Japanese authorities has been making immense efforts to forestall the yen from weakening," specified arsenic by intervening successful the exchange-rate marketplace to enactment its currency, Kuroda said.

After a prolonged play of ultra-easy policy, the BOJ has begun raising involvement rates, portion the authorities made uncommon currency marketplace interventions successful 2022 and past twelvemonth to boost the yen, which successful July deed a 38-year debased adjacent 162 to the dollar. The dollar ended this week astir 148 yen.

"The BOJ is not intentionally guiding the yen little with monetary policy. If there's immoderate misunderstanding connected that point, it needs to beryllium addressed," Kuroda said.

While helium has spoken successful respective seminars, it was the archetypal clip Kuroda appeared connected tv since retiring arsenic BOJ head.

BOJ TO CONTINUE NORMALISING RATES

The cardinal slope is unwinding the extremist monetary easing that Kuroda engineered during his 2013-2023 tenure to interruption Japan escaped from decades of deflation and sputtering growth. Under him, the BOJ deployed a monolithic asset-buying programme successful 2013, past antagonistic involvement rates and enslaved output power successful 2016.

Yen falls caused by the archetypal stroke of stimulus, and further declines driven by prospects of prolonged debased rates, drew disapproval from Washington, including the archetypal Trump administration, that Tokyo was trying to support the yen anemic to springiness Japanese exports a competitory advantage.

Under existent Governor Kazuo Ueda, the BOJ exited the extremist stimulus measures successful March past twelvemonth and raised short-term rates to 0.5% successful January, connected the presumption that Japan was connected the cusp of sustainably achieving its 2% ostentation target.

Kuroda said the BOJ was taking the close measurement by gradually raising rates arsenic maintaining ultra-loose argumentation for excessively agelong could thrust up inflation.

"The BOJ is already normalising monetary argumentation and volition steadily proceed connected this front, specified arsenic by gradually hiking rates toward levels deemed neutral" to the economy, Kuroda said.