The Bank of Japan should be prepared to counter gains in the yen if U.S. Federal Reserve Chairman Ben Bernanke signals more policy easing during the central bankers' forum in Jackson Hole, Wyoming, a former BOJ official said.
"The absence of action on its own would encourage investors to buy up the yen," Naohiko Baba, chief Japan economist at Goldman Sachs Japan Co. and a former lead financial system analyst at the central bank, said Thursday in Tokyo.
"The Bank of Japan learned that lesson last year" when it waited until October to add monetary stimulus after Bernanke suggested the U.S. may need a second round of quantitative easing, he said.
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