The Bank of Japan should reject calls for it to buy foreign currency bonds to weaken the yen because such a move would hurt its independence, said Makoto Utsumi, a former top currency official.
Such purchases would be "akin to currency intervention and wouldn't be in the bank's realm of authority," said Utsumi, 78, a former vice finance minister for international affairs and now president of Japan Credit Rating Agency Ltd. "We're not in a situation where we need to blur that distinction."
Signs of a global slowdown have boosted the yen's safe haven appeal, sending it to an 11-year high versus the euro in July. It was trading around 78 per dollar Tuesday in Tokyo, less than 4 percent from the postwar record of 75.35 on Oct. 31. Former Deputy BOJ Gov. Kazumasa Iwata and new Policy Board member Takehiro Sato, who was appointed last week, have called for the bank to weigh buying foreign currency bonds.
With your current subscription plan you can comment on stories. However, before writing your first comment, please create a display name in the Profile section of your subscriber account page.