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Dow Jones Newswires: BOJ board member Adachi rejects tightening speculation

Bank of Japan policy board member Seiji Adachi rejected some speculation in the markets that the bank may follow other global central banks in tightening monetary policy to avoid further falls in the yen.

“If the bank uses monetary policy to respond to short-term fluctuations [in the foreign exchange market] before achieving its goal for underlying inflation, it would bring negative effects on the Japanese economy,” Adachi said in a speech on Thursday.

Tightening monetary policy at this stage could increase the debt burden for companies and households, which in turn could make them hesitant to spend, Adachi said.

He added that the BOJ will continue with its current easing policy, as annual inflation, excluding volatile factors such as higher energy costs, is still around 1%–half of the bank’s target.

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