TOKYO (Reuters) -The Bank of Japan should continue to proceed with monetary tightening, which would support a “normalization of the yen’s weakness” and rebalancing of bilateral trade, the U.S. Treasury Department said on Thursday.
“BOJ policy tightening should continue to proceed in response to domestic economic fundamentals including growth and inflation, supporting a normalization of the yen’s weakness against the dollar and a much-needed structural rebalancing of bilateral trade,” the Treasury said in its exchange-rate report to Congress.
“Treasury also stresses that government investment vehicles, such as large public pension funds, should invest abroad for risk-adjusted return and diversification purposes, and not to target the exchange rate for competitive purposes,” the report said on Japan.
(Reporting by Leika Kihara; Editing by Himani Sarkar)
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