Bank of Japan Governor Masaaki Shirakawa said on Monday that the central bank needs to closely watch recent rises in the yen, which may hurt the country's economy by undermining exports, corporate revenue and sentiment.
"The United States, Europe, emerging and commodity-producing economies are all saddled with risks. Given these risks in the overseas economy, we need to carefully watch moves in the currency market," Shirakawa said in a speech at a seminar.
The BOJ eased monetary policy just days after the devastating earthquake in March by topping up a pool of funds to buy assets ranging from government bonds to private debt.
It has kept monetary policy on hold since then, but has expressed its readiness to ease credit further if the global economic slowdown and recent yen strength threaten Japan's return to a moderate economic recovery. (Editing by Edmund Klamann)