Bank of Japan chief: Strong yen has positives and negatives

NEW YORK (Forex News Now) – Bank of Japan Governor Masaaki Shirakawa said Monday that a stronger yen would hurt exporters in the short term but be beneficial to the country’s trade in the long term.

“In the short run, the appreciation of the yen depresses the revnue and profits of exporting firms,” Shirakawa said in a speech at the Economic Forum in Nagoya that is likely to affect currency trading.

He added: “It should also be noted that the appreciation of the yen, from a longer-term perspective, has the positive effect of bringing about an improvement of the terms of trade through a decline in import prices.”

As head of the central bank since April 2008, Shirakawa’s speeches are analysed by traders looking for hints about future monetary policy.

The yen fell against the dollar at 8:00 A.M., GMT on Monday, trading at 83.89, down 0.22% on the day.