The Bank of Japan could boost its monetary stimulus to address any surge in the yen triggered by the Greek crisis, though any fallout from Europe will probably be limited, said an aide to Prime Minister Shinzo Abe.
"The yen may appreciate as it's considered as a safe-haven currency, but even if that happens, the BOJ can respond by expanding stimulus further," Koichi Hamada said in an interview in Tokyo on Monday. Hamada notes that the yen may in fact weaken because the U.S. is moving to tighten its monetary policy.
The government and Bank of Japan have played down the threat of turmoil spilling over to Japan, noting that direct economic links with Greece are limited. The yen returned to around levels it traded at before the vote in Greece, after gaining about 1 percent in the immediate aftermath of Sunday's referendum.