TOKYO (Reuters) - Japan intervened in the currency market and the central bank eased monetary policy on Thursday, joining Switzerland in efforts to tame currencies buoyed by safe-haven demand from investors fretting about the health of the global economy.
Below are key quotes from Japanese policymakers on the joint action to prevent further yen rises from hurting an economy just emerging from the damage wrought by the March earthquake:
FINANCE MINISTER YOSHIHIKO NODA, after BOJ easing:
“The BOJ took timely and appropriate action amid an appreciating yen and recent changes in the economic and financial situation, sharing the government’s view on the severe state of the economy. I expect its move to be effective.
“I will continue to watch the market closely and will take appropriate action ... Given the current international financial situation, I would like to continue to communicate with other countries.”
(Asked if Japan will intervene during London market hours)
“I won’t comment on how we will intervene ... Our intervention is not aimed at a specific (currency) level.”
BOJ GOVERNOR MASAAKI SHIRAKAWA, after monetary easing:
“We are always closely communicating with the finance ministry. We exchange information on issues like the economy, prices and financial developments ... As for current economic conditions, we basically share the same view.”
(Asked if the BOJ is ready to boost asset purchases further)
“We think we took enough steps after carefully examining economic and price developments as well as the risks to the outlook. Having said that, the economy is a living thing. We central bankers tend to say, ‘Never say never’.
“We pride ourselves for taking drastic and powerful monetary easing today by examining economic and market developments, as well as various uncertainties such as the effects of the base year revision for the consumer price index in August.”
“The BOJ does not aim its policy at specific currency levels. We made policy decisions by assessing how currency fluctuations, among other factors, were impacting the economy and prices ...
“The yen’s appreciation comes at a time when the economy faces the problem of power supply restrictions.
“We judged that rises in the yen have economic costs including the risk of damaging corporate sentiment and encouraging companies to shift production overseas.”
“The BOJ issued its outlook report in April and conducted a midterm review in July. The economy’s current performance is in line with our views expressed in the outlook report and we have not changed our main views on the economy’s outlook ...
“But with regard to the risk factors we have been aware of all along ... we concluded that downside risks warranted closer attention so we made today’s policy decision.
“We had the option of spending two days on a rate review and holding off on the announcement until Friday, but markets would have been flooded with speculation in the meantime ... Shortening the rate review and showing our determination to eliminate uncertainty was obviously a better move.”
CPI BASE-YEAR REVISION
“The base-year revision is highly likely to push down CPI growth to around zero or negative readings ...
“There is no change to our view that the deflationary trend will gradually ease ... The CPI revision itself will not have added impact on the economy.”
ECONOMICS MINISTER KAORU YOSANO, after BOJ easing:
“This is also a question of whether the yen is strong or other foreign currencies are weak, so I think G7 and G20 officials will need to thoroughly discuss currency moves from here on as a global issue.”
Reporting by Leika Kihara, Rie Ishiguro, Stanley White and Kaori Kaneko; Editing by Joseph Radford and Michael Watson