TOKYO: Japan will not abandon its stake in the Sakhalin-2 liquefied natural gas (LNG) project in Russia as it is essential to energy security, Prime Minister Fumio Kishida said on Thursday, his clearest comments yet on Tokyo’s plans for the development.

Kishida also said in parliament that he expects the Bank of Japan to maintain efforts to achieve its 2% inflation target.

The Ukraine crisis has put Japan’s involvement in the Sakhalin-2 project and similar ones in Russia in sharp focus, particularly after Western oil majors have said they would pull out in protest against Russia’s actions.

While resource poor Japan has been ramping up sanctions against Russia, Tokyo has repeatedly said that Russian LNG is essential to energy security.

“It is not our policy to withdraw” from Sakhalin-2, Kishida said in a response to a question in parliament.

Separately, he said the government “will take appropriate steps on currency policies in close communication with currency authorities in the United States and others, as currency stability is important and sharp exchange-rate moves are undesirable,” when asked about the yen’s recent weakening and its impact on the economy. 

Reuters