Bank of Japan Governor Masaaki Shirakawa said there was no immediate change to the dollar's status as a key global currency despite Standard & Poor's downgrade of the US sovereign debt rating, a Japanese newspaper reported on Saturday.
"It takes a very long time for the world's key currency to change, as was the case when it shifted to the US dollar from the British pound," Shirakawa said in an interview with the Mainichi paper conducted on Friday and published on Saturday. "The US economy is the world's biggest and the market for dollars is the world's most liquid. Everyone uses (the dollar) and I don't think the current situation will change immediately," he said.
The dollar has fallen broadly, particularly against safe haven currencies like the yen and the Swiss franc, on S&P's downgrade of the US credit rating last week and worries about the health of the US economy. Shirakawa also said the Japanese central bank's monetary easing last week was a pre-emptive move to counter the potential harm recent yen rises could have on Japan's economy, and that he preferred to assess its effect on the economy for now.
But he also reiterated that the BoJ will take appropriate action based on economic conditions at the time, signalling the bank's readiness to ease policy again if further yen rises hurt Japan's growth prospects, the paper said.
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