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Bank of Japan policymakers view further monetary easing to shore up inflation as a counterproductive step at present, amid concern it could trigger declines in the yen that damage confidence, sources said.

The yen strengthened after the remarks, which indicate a possible shift in thinking on the exchange rate among officials at the BOJ after the yen’s 22 percent tumble since the bank began unprecedented easing nearly two years ago.

Gov. Haruhiko Kuroda in December offered a balanced view, saying a weak yen tends to boost profits of global companies and weighs on households and small firms.

Also arguing against expanding already-record stimulus are recent gains in exports and production, along with a boost from fiscal policy, said the sources, who asked not to be named because the BOJ discussions they are involved with are private.

The exchange rate, hovering around the weakest level since mid-2007, has spurred criticism from importers and small companies that haven’t enjoyed the benefits of exporters. While this week Kuroda said the yen’s drop from excessive strength hasn’t caused problems, economists at banks including Barclays PLC and Mizuho Securities Co. have cited the yen’s weakness for sluggish consumer sentiment.

“Market participants weren’t mentally prepared for a yen-buying catalyst,” said Satoshi Okagawa, a Singapore-based global markets analyst at Sumitomo Mitsui Banking.

Kuroda led a divided BOJ Policy Board on Oct. 31 to increase the pace of asset purchases, driving down the currency against the dollar.

Last month, he said that while the drop in oil prices could delay inflation reaching the BOJ’s target in the fiscal year starting in April, the economy will benefit from the lower energy bill over the longer term, helping to stoke consumer price gains.

“I don’t think (the) weakening yen so far has caused problems for Japan’s economy overall after it corrected from excessive gains,” Kuroda said this week at a Group of 20 nations meeting in Istanbul.

More than a dozen central banks have injected extra stimulus so far this year, fueling debate about the risk of a global currency war.

While some people question the existence of any conflict — arguing that falling exchange rates merely reflect efforts by central banks to spur lackluster domestic economies, David Woo, head of global rates and currencies research at Bank of America Merrill Lynch in New York, wrote in a report this month that “there is a growing consensus in the market that an unspoken currency war has broken out.”

The U.S. will “oppose and push back very hard” against attempts to boost exports by weakening exchange rates, Treasury Secretary Jacob J. Lew said.

“It would be a very big mistake for the world to get into a situation where I think there is kind of a race to devalue,” Lew said in an interview with India’s NDTV television channel broadcast Thursday.

Last September, when the yen was trading at around 109.5 per dollar, Sadayuki Sakakibara, head of the Keidanren business lobby, said the negative impact on the economy will increase if the yen weakens any further. A weaker yen pushes up the cost of gasoline, increasing costs for drivers, he said Sept. 29.

An excessively weak yen and sudden moves in foreign exchange rates are bad, the ruling Liberal Democratic Party’s secretary-general, Sadakazu Tanigaki, said last year, according to Kyodo News.

The central bank doesn’t need more stimulus, according to Ryutaro Kono, an economist at BNP Paribas SA. Lower oil prices will stimulate economic growth and policymakers will favor yen stability, he said last month.

“I expect we will generate a positive economic cycle going forward,” Finance Minister Taro Aso said this week. A fiscal package in December and the Abe administration’s various measures, including talks with business lobbies and labor unions, will lead to wage growth as companies enjoy record profits, he said.

A Bloomberg News survey last month showed 26 of 33 of economists were expecting the BOJ to expand monetary stimulus by the end of October. Nine of those predicted additional easing as early as April.

Inflation slowed more than forecast in December, weighed down by the decline in energy prices, with a 0.5 percent gain in consumer prices, excluding fresh food and the impact of the consumption tax increase.

That put the BOJ’s main gauge at just a quarter of the 2 percent goal that Kuroda said could be achieved in about two years when he began the unprecedented easing in April 2013.

“Improvements in sentiment have been limited with the decline in gasoline prices offset by higher apparel and food prices linked to yen depreciation,” Barclays economists Kyohei Morita and Yuichiro Nagai wrote in a note.

Consumer sentiment dipped after the increase in monetary stimulus in October. A gauge of current conditions in the Cabinet Office’s Economy Watchers survey declined to 41.5 in November from 44 in October, before recovering to 45.6 in January.

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