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BOJ's Shirakawa: yen rises hurt economy short term

Published 01/03/2009, 07:07 PM
Updated 01/03/2009, 07:10 PM

TOKYO, Jan 4 (Reuters) - Bank of Japan Governor Masaaki Shirakawa said on Sunday that a rising yen would have a big negative impact on Japan's economy short term.

But he said a strong currency had some positive effects in the long term, such as increasing purchasing power.

Shirakawa, speaking on national broadcaster NHK, also said he had no preset idea about future monetary policy and would take into account past experience from zero rates and quantitative easing in Japan.

The dollar sank to just over 87 yen last month, its lowest in more than 13 years, as the financial crisis prompted investors to flee risk.

It has risen to 92 yen since then, but the Japanese currency's ongoing strength, combined with plunging demand for manufactured exports, have deepened Japan's recession. (Reporting by Leika Kihara; Editing by Rodney Joyce)

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