TOKYO: Ahead of the Bank of Japan's two-day policy meeting, which starts on Thursday, the Japanese government has piled pressure on the central bank to assist solve the yen's drop.
"We expect the Bank of Japan to take suitable actions in collaboration with the government," Hirokazu Matsuno, Chief Cabinet Secretary, told reporters.
The yen has fallen to its lowest level versus the US dollar in 24 years, fueling speculation that the central bank may be compelled to tighten its ultra-easy monetary policy.
In contrast to its American counterpart, the Bank of Japan has maintained extremely low-interest rates. "Excessive volatility and disorderly changes (in foreign exchange rates) impair the economy's and financial system's stability," Matsuno added. "We will work closely with the US and other monetary authorities and respond properly as needed," he said.
Matsuno declined to comment on the likelihood of the government interfering in the currency market to stem the yen's drop, which has wreaked havoc on the Japanese economy by driving up import costs.