Japan central bank chief to examine impact of strong yen on economy

18:21, August 10, 2010      

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Bank of Japan Governor Masaaki Shirakawa said on Tuesday he recognized the downsized risk the yen 's rise poses for Japan's export-driven economy and pledged to examine the situation in a "balanced way."

Speaking at a press conference held after the central bank's two-day policy meeting the BOJ chief highlighted the key points discussed regarding the yen, economy and business sentiment.

"I acknowledge that yen rises pose a downside risk to business sentiment," Shirakawa said.

"We need to examine the impact on the overall economy in a balanced way."

"We spent a lot of time debating how the recent yen rise could affect business sentiment and the Japanese economy. This is an important point for us to examine, so we spent a lot of time debating it," the central bank chief said.

The yen's appreciation comes at a time when government data indicates the nation's recovery is slowing.

Industrial production fell the most in 16 months in June, and the unemployment rate climbed to a seven-month high.

The nation's current-account surplus narrowed for a second month as exports grew at a slower pace, although the BOJ kept interest rates steady on Tuesday and maintained its economic assessment, stating that the nation will continue to expand.

Separately, the government maintained its overall assessment of the overall economy saying that, "Although the economy has been picking up steadily and the foundation for a self-sustaining recovery is being laid, it remains in a difficult situation such as a high unemployment rate."

Shirakawa concluded that the BOJ's assessments for Japan would not just be made from a domestic point of view, but balanced assessments will be made by "taking into consideration the global financial situation."

Source: Xinhua


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