TOKYO, Sept. 7 (Xinhua) -- Bank of Japan (BOJ) Governor Maasaki Shirakawa said on Tuesday that the central bank was considering further policy options and would act in an " appropriate" way if and when necessary.
"We will take the most appropriate action by examining the merits and drawbacks of various steps," Shirakawa told a news conference.
The BOJ chief once again expressed his concern of the yen's appreciation that has hit 15-year highs against the U.S. dollar recently and is severely hampering Japan's export-led recovery.
"We are aware that Japanese exporters have been greatly affected by the yen's strength," Shirakawa said at the news conference at the conclusion of the central bank's two-day policy meeting.
The BOJ maintained its key interest rate at a razor-thin 0.1 percent at the end of its two-day policy meeting and promised to take more policy actions if deemed necessary to jumpstart an economy plagued by deflation.
"The BOJ won't respond to every move in currency rates and share prices, but we will guide monetary policy while taking into account our economic and price outlook over the coming few years. Other central banks are also attaching the utmost importance to this," Shirakawa said.
"The BOJ is watching market moves very carefully, as how the market moves could affect economic and price trends. It is important to convey our stance (to markets)," he added.
Gains in Japan's currency have moderated since the BOJ eased policy at its emergency meeting, with the yen advancing 0.5 percent against the dollar in the past week compared with a 2.7 percent advance in August. It fell as low as 85.23 on Sept. 3 following the U.S. payrolls report.
"The yen's gains have paused for now as excessive pessimism about the U.S. economy has been somewhat reduced," said Hideo Kumano, a former BOJ official.
The BOJ chief reiterated this sentiment, stating the bank would be vigilant as to the yen's moves at a time when the spotlight is firmly trained on the current leadership election in Japan's ruling party and how this may affect pressure on the BOJ to do more to defeat deflation and shore up the recovery.
"Still, there's no reason the BOJ should let its guard down, as the yen hasn't reversed its course," Shirakawa said.
"In any case, currency rates fluctuate on a daily basis due to various factors. It is not appropriate to determine if our policy actions were a success or not by short-term market moves alone," he added.
"We are fully aware that export-related companies are considerably affected by the yen's recent rise. But monetary authorities are unable to control currency rates freely. We are carefully watching how the yen's rise impacts the Japanese economy, " he said.
Last month the BOJ decided to ease its already ultra-loose policy by increasing the amount of low-interest loans available to the money market to 30 trillion yen (356.67 billion U.S. dollars) from 20 trillion yen (237.78 billion U.S. dollars), in an extraordinary policy meeting.
Whilst keeping open the possibility of more action, policy makers on Tuesday held the benchmark overnight rate at 0.1 percent, where it's been since December 2008.
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