Japans cenbank is not aiming to manipulate currency, PM says

div classBodysc17zpet90 cdBBJodivpBy Leika Kiharap

pTOKYO Reuters Japanese Prime Minister Fumio Kishida said the central banks monetary policy is aimed at achieving its 2 inflation target, not at manipulating currency rates, brushing aside the view the country must end an ultralow interest rate policy to stem sharp yen declines.pdivdivdiv classBodysc17zpet90 cdBBJodiv

pKishida also said the recent rise in domestic inflation was due mostly to a global spike in crude oil and raw material costs, rather than the weak yen.p

p“The Bank of Japan BOJ is conducting monetary policy to achieve its 2 inflation target, not to manipulate currency rates,” Kishida told parliament, when asked by an opposition lawmaker about the relationship between the yen‘s declines and the central bank’ prolonged ultraloose policy.p

p“The government hopes the BOJ continues to strive toward achieving its inflation target, with an eye on economic, price and financial developments,” he said on Friday.p

pThe yen slumped to a fresh 20year low of 126.56 against the dollar on Friday, as investors focused on the gap between the U.S. Federal Reserve‘s aggressive rate hike plans and the BOJ’s pledge to maintain its ultralow policy for the time being.p

pWhile a weak yen boosts Japanese exports, it inflates import costs for energy and food products that have already seen prices jump due to the war in Ukraine.p

pSome lawmakers have blamed the BOJs ultraeasy policy for accelerating yen declines and adding pain to households and firms by pushing up living costs.p

pUnder a policy dubbed yield curve control, the BOJ pledges to guide shortterm rates at 0.1 and cap longterm borrowing costs around 0 to fire up inflation to its 2 target.p

p Reporting by Leika Kihara Editing by Himani Sarkar and Kim Coghillp

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