UPDATE 1-BOJ Kuroda blames yen’s fall on strong dollar, upbeat on economy

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Bank of Japan Governor Haruhiko Kuroda speaks at a news conference in Tokyo, Japan, January 21, 2020. REUTERS/Kim Kyung-Hoon

RIYADH (Reuters) – Bank of Japan Governor Haruhiko Kuroda said on Saturday the yen’s recent declines were largely driven by a strong dollar, shrugging off some market views that the widening coronavirus epidemic is triggering an outflow of funds from Asia.

Kuroda also said he had not changed his view that Japan’s economy would continue to recover moderately, suggesting that he saw no immediate need for the BOJ to expand stimulus.

“If needed, we will take additional monetary easing steps without hesitation,” he told reporters upon arriving at a Group of 20 finance leaders’ gathering in Riyadh.

“But the situation is still uncertain. I don’t think Japan’s moderate economic recovery is derailing.”

The yen bounced back on Friday after suffering its worst two-day performance since 2017 on worries about the health of Japan’s economy, which has been hit by supply-chain disruptions and a plunge in Chinese tourists caused by the virus outbreak.

Kuroda said the Japanese economy was unlikely to enter a severe downturn as capital expenditure remained firm, adding that he saw no changes to the fundamentals driving exchange-rate moves.

“When you look at recent developments, the dollar is strengthening against the yen and the euro,” Kuroda said.

“Various currencies, including those in Asia, are weakening against the dollar,” he said, dismissing the view that the yen could be losing its status as a safe-haven currency.

Reporting by Leika Kihara; Writing by Saeed Azhar; Editing by Pravin Char

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