By Leika Kihara
TOKYO, May 13 (Reuters) - Former Bank of Japan Governor Haruhiko Kuroda said on Wednesday it was unlikely the yen would weaken beyond 160 per dollar as authorities appeared to be defending that level with currency intervention.
"My belief is that a dollar/yen rate around 120-130 is seen as an equilibrium based on Japan's economic fundamentals," Kuroda said in a seminar. The dollar stood around 157.80 yen on Wednesday.
The key drivers behind the yen's downtrend were the rising cost of
importing oil since the Ukraine war, and the interest rate divergence between Japan and the U.S., said Kuroda, who oversaw Japan's exchange-rate policy as its top currency diplomat before heading the BOJ.
Kuroda said Japan's economy was in "extremely good shape" and inflation was moving around the central bank's 2% target, driven by solid wage gains.
"With the central bank gradually raising its policy rate and inflation moving around 2-3%, it's natural for the 10-year Japanese government bond yield to rise to current levels of around 2.58%," Kuroda said.
During his decade-long stint until 2023, Kuroda deployed a massive stimulus package to pull Japan out of prolonged deflation and economic stagnation. His successor, incumbent governor Kazuo Ueda, exited the ultra-loose policy in 2024.
(Reporting by Leika Kihara; Editing by Toby Chopra and Andrew Heavens)
