BoJ officials commenting on Tanken and the value of yen

The Japan chief Cabinet Secretary Matsuno said that he believes that the BoJ Tankan survey shows that economy looking upward overall but issues from pandemics remain.

Another Bank of Japan official commented surrounding recent data ad said Japanese manufacturers that saw business conditions worsen mainly pointed to the impact of rising raw material prices, parts shortages.

Sentiment worsened for a wide range of sectors among non-manufacturers, it was stated, which mainly pointed to the impact of a resurgence in covid-19 infections, rising input costs.

Not many firms were responding to the Tankan talking about the direct impact of the Ukraine war, though the crisis likely affected firms via a rise in raw material costs. Tankan japan firms' inflation forecast 1 year ahead, at 1.8%, is highest on record.

Additionally, the official said that more firms in the Tankan survey saw a weak yen as a factor pushing up import costs rather than boost to earnings.  Meanwhile, Mitsuhiro Furusawa, who was the head of currency intervention at Japan's Ministry of Finance, said that it is not good for the yen to keep dropping as it reflects Japan's competitiveness. ''Its meaningless to set a line in the sand for USD/JPY...speed of yen moves more important in gauging the authorities' alarm over a weak yen.'' 

The Japanese Finance Minister, Suzuki, said that FX stability is important and that sharp fx moves are undesirable. he adds that the government will take appropriate steps on fx policies and will be in close communication with the US & other currency authorities, based on international agreements. Suzuki said that yen's recent weakening could affect Japan's economy, although the BoJ has an inflation target, not a target for FX rates.