Kuroda commits to BoJ 2% target rate

The yen rebounded after a speech by Bank of Japan Governor Haruhiko Kuroda, and the cost of insuring Japanese debt against default fell the most in two weeks.

Earlier in the day, the central bank released the summary of its Oct. 31 policy board meeting, where the proposal to implement additional easing measures passed by a thin 5-4 vote.

The minutes showed a sharp divide between Mr. Kuroda and some other board members over the effects of the new steps. Some members warned that the cost of the measures outweigh their benefits and questioned Mr. Kuroda’s fundamental strategy to boost inflation expectations through the expanded easing.

But Mr. Kuroda said the BOJ’s commitment to its price target is one of the “two engines” that influence such expectations. The other is the actual inflation rate, which is now around 1%.

“Therefore, the bank has considered it necessary to pursue monetary easing (more aggressively)…as well as to reiterate its unwavering resolution” to achieve its 2% price target, Mr. Kuroda said.

The yen gained against all 16 major peers by 3:48 p.m. in Tokyo, The yen climbed 0.4 percent to 117.85 per greenback today. The currency weakened against 12 of its 16 major counterparts yesterday, falling 0.4 percent. It hit a seven-year low of 118.98 to the dollar on Nov. 20.

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