Japan’s finance minister said yesterday that he was paying close attention to movements in the foreign currency markets as a stubbornly strong yen threatens the country’s export-led recovery from recession.
The rise of the currency, which hit a 15-year-high against the US dollar last week, has set alarm bells ringing in the country, which saw economic growth slow sharply in the second quarter.
“I am watching the foreign exchange market with great interest,” Yoshihiko Noda said. He declined to be drawn further, refusing to discuss possible intervention or to comment on “things that concerns prices” of currencies.
In Tokyo early afternoon trade, the yen was quoted at 85.30 against the US dollar and 109.24 against the euro.
Noda’s comments come ahead of expected talks between Bank of Japan chief Masaaki Shirakawa and Prime Minister Naoto Kan on Monday, which analysts hope will lead to pressure on the central bank to introduce further easing policies to halt the appreciation of the yen.
Earlier this week, Kan met with key ministers to discuss a new stimulus package for next month, in a bid to revive the Japanese economy, which has long been hobbled by flat domestic demand.
The Nikkei Business Daily reported that the government plans to introduce new subsidies specifically designed to boost corporate investment in plants making environment-friendly products, such as automotive lithium ion batteries and LED lighting.
The government is also considering expanding programs for job seekers, boosting financing available to small and medium-sized businesses and increasing subsides to companies that hire new graduates on a trial basis, it said.
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