Japanese Finance Minister Hirohisa Fujii yesterday defended his recent remarks widely viewed as favoring a strong yen, stressing that he wanted currency stability and would take unspecified “steps” to achieve that.
Fujii said he had been making a general statement about the dangers of pushing policies that weaken currencies as a negative for global prosperity.
“I wanted to appeal to the world,” about such dangers, Fujii said on a nationally televised show on TV Asahi.
“I didn’t say a single word about the yen,” he said.
He said big swings in exchange rates were not good for the economy, and promised that Japan will take the appropriate steps.
Such measures are likely to include intervention, although he declined to use that word or give a specific rate for what he thought was best for the yen.
“I don’t want to use the word ‘intervention,’ but some steps will be taken,” Fujii said.
Earlier this month, the dollar fell to a nine-month low at about ¥88, although it has recently recovered to about ¥90. The earnings forecasts of some Japanese exporters assume the dollar will average about ¥95.
A strong yen erodes the value of overseas earnings for Toyota Motor Corp and other Japanese manufacturers, which have been struggling to stage a comeback after getting hammered last year by the financial crisis.
Fujii said Japan’s past policies were rapidly growing outdated.
Such policies had relied on exports for growth and had tended to favor a weak yen to boost overseas profits for big-name export-reliant companies, when they are converted into yen.
The future of Japan should be more about social welfare, local economies and environmental businesses that help even out gaps between the poor and rich, Fujii said.
Old-time policies that had pushed for economic growth worked when Japan was still modernizing after World War II, but were no longer relevant, he said.
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