Japan Must Address Trump's Concerns Over Yen Policy, Says Ex-BOJ Chief

Former Bank of Japan (BOJ) Governor Haruhiko Kuroda emphasized the need to clear up any "misunderstanding" U.S. President Donald Trump might have regarding Japan’s monetary policy. Trump recently claimed that Japan and China were unfairly devaluing their currencies, but Kuroda countered that Japan has actively worked to prevent excessive yen depreciation, even intervening in currency markets.

Following years of ultra-loose monetary policy, the BOJ has begun raising interest rates. Under Governor Kazuo Ueda, it ended radical stimulus measures and increased short-term rates to 0.5% in January, signaling a shift toward monetary normalization. Kuroda defended the BOJ's stance, stressing that the central bank does not intentionally weaken the yen and that gradual rate hikes are necessary to avoid inflationary risks.

Japan’s prolonged low rates previously sparked criticism, including from Trump’s first administration, which accused Tokyo of keeping the yen weak to boost exports. However, Kuroda highlighted that the BOJ’s current approach is focused on stabilizing inflation at its 2% target. He warned that maintaining low rates for too long could fuel inflation, while raising them too quickly could hurt economic growth.

With Japan's economy improving, Kuroda predicted continued rate hikes in the coming years. The yen, which hit a 38-year low near 162 per dollar in 2023, has since rebounded to around 148. While currency fluctuations remain a concern, Japan remains committed to balancing economic stability and monetary policy adjustments.

Kuroda's remarks, his first TV appearance since stepping down in 2023, aim to reassure global markets and address U.S. concerns about Japan’s financial strategy.