The Bank of Japan's new unlimited lending program may further weaken the yen by reviving the carry trade after the currency sank to a six-month low last week, a senior official at the central bank said.
A weaker yen "isn't our main objective, but it's a common understanding that an accommodative policy eventually leads to the depreciating of one's own currency," Executive Director Hideo Hayakawa, 58, the official in charge of overseeing the financial system, said in an interview Monday.
The BOJ unveiled a program of low-interest loans last week in a bid to up demand for credit and spur growth as the economic recovery flags. The yen touched 80.68 per dollar last Friday, its lowest since April, three days after the BOJ announced the program and an ¥11 trillion expansion of an asset-purchase fund.