By Tetsushi Kajimoto

TOKYO (Reuters – A number of members of Bank of Japan’s policy board indicated that in October, weakening the yen would have a beneficial effect on Japan’s overall economy. However, its effect on exports is not as powerful as it was before.

The nine-member board discussed the effects of the weakening yen on Japan’s economy at its Oct. 27-28 meeting. One member pointed out that the currency’s impact on different sectors and business sizes is not equal.

According to the minutes, “Some members claimed that the negative effects of the weakening yen on exports has weakened but that these are having a positive influence on Japan’s economy in general via increased stock prices and overseas business profits.”

A member stated that the weakening yen is indicative of differences in inflation and monetary policies in different countries. Therefore, it’s important to examine all channels such as the financial markets and the real economy.

While observing the effects of COVID-19, board members decided that they wouldn’t hesitate to make additional easing moves if necessary.

BOJ’s October meeting saw it maintain its goal for short-term interest rates of -0.1%, and for 10-year yields of around 0% during the two-day rate revision.

After hitting an Oct. 20 four-year high at 114.585, the dollar is now moving within a tight range of 113 to 114 yen. This prompted the government’s call for stability in its currency.

Although the BOJ reduced emergency funds for pandemics, it maintained a very loose policy. Small firms were also granted financial relief.

Although the BOJ maintained that Japan’s economy was showing signs of improvement, it warned that supply and pandemic concerns could cloud its outlook.