Japanese government and central bank repeat concerns about yen plunge

Tokyo — A Japanese government spokesman issued a new warning to the market on Monday, saying that Tokyo is worried about the sharp depreciation of the yen currency and is ready to “respond appropriately” as needed. Stated.

This statement reflects a joint statement by the government and the central bank on Friday, but it could not avoid the yen’s depreciation against the dollar, the lowest level since October 1998, to 135.22.

“It is important that the exchange rate moves stably, reflecting the fundamentals. However, there are concerns about the sharp depreciation of the yen these days,” Chief Cabinet Secretary Hirokazu Matsuno said at a press conference.

“We are in close contact with the monetary authorities of each country and are ready to respond appropriately as needed.”

However, Matsuno declined to comment on whether Tokyo would intervene to curb the sharp depreciation of the yen.

Unlike other major central banks that have flagged aggressive rate hikes to deal with inflation, the Bank of Japan (BOJ) has repeatedly promised to keep interest rates low, and Japanese assets are investors. Not attractive to.

The growing policy gap has caused the yen to fall by more than 15 percent against the dollar since early March.

Haruhiko Kuroda, the governor of the Central Bank, also warned of the disadvantages of the weak yen, breaking away from the long-standing stance that the weak yen is generally good for export-dependent economies.

“The recent sharp depreciation of the yen has been detrimental to the Japanese economy and makes it difficult for companies to make business plans, so it is not desirable,” said bank governor Kuroda.

“The Bank of Japan will work closely with the government to scrutinize the impact of currency movements on the economy and prices.”

Kuroda reiterated his pledge to keep monetary policy ultra-loose to support the economy without fully recovering from the impact of the coronavirus pandemic.

The yen rose temporarily late Friday after a rare joint statement, considered the strongest warning to date that Tokyo could intervene to support the currency.

However, the currency lost momentum as the dollar rose after US inflation data on Friday heightened market expectations for the Federal Reserve to aggressively raise interest rates in the fight against the surge in inflation.

Reika Kihara and Kantaro Komiya

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