Markets | Fri Jun 12, 2015 11:09pm EDT

TOKYO

The Bank of Japan governor's remark playing down the chance of more weakness in the yen was not part of a concerted effort by Tokyo to keep the currency's sharp declines in check, government and central bank officials with knowledge of the matter said.

The yen jumped 2 yen from a near 13-year low against the dollar after Governor Haruhiko Kuroda told parliament on Wednesday the yen was unlikely to fall further on a real effective exchange rate basis as it was already "very weak."

The remark caught finance ministry bureaucrats off guard. The Ministry of Finance (MOF) has direct jurisdiction over currency policy.

BOJ officials say Kuroda had spoken off the cuff as he was not using a prepared script when he made the remark and wasn't signalling any change to the central bank's view that a weak yen was beneficial to Japan's economy.

"The governor had no intention of sending a warning shot to markets," said one official on condition of anonymity.

In contrast, Finance Minister Taro Aso - who was present at the same Diet session - only said the yen should move "slowly and steadily" regardless of whether it was up or down.

TOO MUCH LIP SERVICE?

Kuroda's remarks sent Tokyo stocks lower.

Chief Cabinet Secretary Yoshihide Suga said Kuroda likely commented "under his own responsibility," suggesting that the remark had no blessing from the government.

Economics Minister Akira Amari said Kuroda told him informally that his remark was misinterpreted and he had no intention of moving markets. [ID:nL3N0YW3IX]

Analysts say markets reacted particularly strongly to Kuroda's remark because of his background as a former currency tsar and his track record of keeping to his script.

Early in the five-hour parliament session focusing on monetary policy, Kuroda was reading from a prepared script, when he said the dollar/yen could move both ways despite diverging policy paths between the Federal Reserve and the BOJ.

He went off script in the afternoon when Seiji Maehara, an opposition lawmaker and former Economics Minister, asked whether a decline in the yen's real, effective exchange rate to levels hit in 1973 meant Japan's economic strength had weakened.

"There wasn't any change to Kuroda's main message, which is that currency moves should reflect fundamentals," said one of the government officials.

"But he may have paid a bit too much lip service this time."

Etsuro Honda, Abe's economic adviser, told Reuters he saw no problem with current dollar levels around 123 yen as long as the pair's moves were stable.

Asked whether Kuroda's remark put a damper on Abe's plans to revive the economy, he said: "That wasn't the case."