Bank of Japan Governor Masaaki Shirakawa on Tuesday said that it is imperative that each influential economy maintain sufficient exchange rate flexibility.
"Under economic and financial globalization, inflexibility of exchange rates may trigger abrupt changes in international capital flows and increase the burden of monetary and prudential policies," he said while attending the Federal Reserve Bank of San Francisco Conference.
According to the policymaker, the issue of cross-border resolution of globally active financial institutions "is a quite big challenge for policymakers now."
He also noted that global economy would be more vulnerable to shock when it consists of homogeneous countries in terms of economic structure and policy framework than when it is a hybrid system embracing diversity.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.