Japan yesterday stepped up its warnings over recent steep rises in the yen, with the government pressing the Bank of Japan to help support the economy ahead of its two-day monetary policy meeting.
Japanese Prime Minister Naoto Kan called on the Bank of Japan (BOJ) to support the country’s economy as the stronger yen is a “source of concern” for the government.
The administration “wants the BOJ to underpin the economy with its monetary policy,” Kan said.
The request came before the Bank of Japan holds a two-day policy meeting starting today amid expectations that it may decide further easing measures to boost the economy.
Bank of Japan Governor Masaaki Shirakawa said the yen’s strength threatened the profits of Japan’s biggest exporters and could inflict harm on the world’s third-biggest economy.
“We are paying particular attention to the negative impact of the yen’s appreciation on the economy, such as a decline in exports and corporate profits, as well as a deterioration in business sentiment under the current conditions, where uncertainty is high on the outlook for overseas economies,” he said.
The Ministry of Finance has aimed to engage in discussions on foreign exchange intervention with its counterparts in the US and Europe, Dow Jones Newswires reported. Japanese Finance Minister Yoshihiko Noda has said the yen is “overvalued” and its recent rise did not reflect economic fundamentals, with the unit’s strength driven by the weakness of other major currencies.
The US dollar has tumbled in recent weeks against the yen, approaching its post-war low of 76.25 struck in March because of risks associated with US debt and recent data pointing to renewed weakness in the world’s biggest economy.
Japan intervened unilaterally in September to weaken the yen with little success, and was joined by its G7 counterparts to do so again on March 18 after the yen struck a post-war high in the wake of the