BOJ Easing Would Trump Intervention in Weakening Yen, Okubo Says

Wrong wrong wrong

BOJ Easing Would Trump Intervention in Weakening Yen, Okubo Says

By Mayumi Otsuma and Kyoko Shimodoi

April 11 (Bloomberg) — Further stimulus by the Bank of Japan would be more effective in weakening the yen than currency intervention, a ruling party lawmaker said, a sign politicians will continue to press the BOJ to do more.

“It’s obvious that the central bank’s policies have more influence over the currency than intervention,” Tsutomu Okubo, a Democratic Party of Japan lawmaker, said in an interview in Tokyo yesterday, citing the yen’s depreciation of more than 4 percent against the dollar since the BOJ added stimulus Feb. 14.

The BOJ refrained from easing policy at a meeting on April 10, spurring calls from DPJ lawmakers including Takeshi Miyazaki for them to undertake “bold and large-scale” action when they gather on April 27. The BOJ’s February decision to increase its asset-purchase fund helped weaken the yen close to an 11-month low against the dollar on March 15.

“Interventions are effective in correcting extraordinary and speculative currency moves, but they aren’t very good at addressing structural and long-term problems,” said Okubo, who’s the deputy head of the DPJ’s policy research council and a former managing director at Morgan Stanley. “It’s obvious what kind of actions the Bank of Japan (8301) should be taking.”