Kuroda's Skills to Be Tested at G-20: BOJ's Policy Aimed toward Deflation, Not Exchange Rate
Katori, Naotake, The Daily Yomiuri (Toyko, Japan)
New Bank of Japan Gov. Haruhiko Kuroda will face a test of his ability to persuade at a meeting of the Group of 20 finance ministers and central bank governors in Washington, where he will have to explain that Japan's drastic monetary easing policy is designed to end deflation, not target exchange rates.
The meeting will be held Thursday and Friday. Currency exchange rates are expected to be a main topic of discussion since the yen's depreciation has been ongoing due to the BOJ's monetary easing policy.
The meeting is Kuroda's G-20 debut as bank chief, and he is expected to face the daunting task of winning over his G-20 colleagues.
Close monitoring sought
The central bank decided April 4 to implement a policy of "qualitative and quantitative monetary easing" that aims to double the amount of money in circulation in two years.
Many believe such a large influx of cash into the market will decrease the value of the yen. In fact, the yen was at one point down more than 6.5 yen against the dollar compared with the day before the central bank's policy decision, and has briefly approached 100 yen against the dollar.
Many emerging economies are unhappy with the recent slide in the yen's value.
The sense of crisis is particularly strong in South Korea, where electronics and automotive firms compete with Japanese makers.
"We need to discuss the effects of [the BOJ's] monetary easing policy on a global level," South Korean Strategy and Finance Minister Hyun Oh Seok has said.
While developed nations generally praise the BOJ's recent policy, some industries are wary of the progress of the yen's depreciation, such as U.S. auto manufacturers.
In a report to Congress on international economic and exchange rate policies released Friday, the U. …