Japanese Finance Minister Taro Aso said the pace of the yen’s weakening has been too fast, speaking a week before a meeting of global finance chiefs where Japan’s currency stance is forecast to be an issue.
Aso told reporters in Tokyo today that the decline has been too rapid, after earlier telling lawmakers the government hadn’t anticipated a rapid move to around 90 per dollar.
The yen slumped 13 percent since mid-November in anticipation of the greater monetary stimulus advocated by Shinzo Abe, who took office as prime minister in December.
The yen’s drop spurred criticism abroad, with Aso’s South Korean counterpart complaining about the risk to his nation’s exports and Russia last month warning about the potential for reciprocal action to drive down exchange rates.
Finance ministers and central bank governors from the Group of 20 nations are scheduled to meet in Moscow next week.
“Aso may be trying to cool the market’s momentum as European authorities are criticizing Japan’s policies,” said Junko Nishioka, chief economist at RBS Securities Co. in Tokyo and a former BOJ official.
“His comments seem to be inconsistent: one moment he’s talking down the yen, the next he’s talking it up.” The yen was up 1 percent at 92.65 per dollar as of 10 a.m. in London.
It earlier rose as much as 1.6 percent, the biggest advance against the dollar since March 17, 2011, after Aso said in Parliament that “the yen’s sudden move from 78 or 79 to 90 was not something we anticipated.”
Stock Rally
Abe won December’s election pledging to end deflation and revive the economy.
Companies from Toyota Motor Corp. to Nissan Motor Co. have soared in recent weeks with the yen’s retreat, and economists at banks from Goldman Sachs Group Inc. to Nomura Holdings Inc. have boosted their projections for growth this year.
The Topix index of shares today posted its 13th straight weekly advance.
“The question remains, however, how this verbal intervention will be viewed by the G-20 ministers,” said Callum Henderson, global head of foreign exchange research at Standard Chartered Plc in Singapore.
The world’s leading economies are on the brink of a “currency war” to keep up with Japan and use devaluation to boost their competitiveness, Russian central bank First Deputy Chairman Alexei Ulyukayev said at a conference in Moscow Jan. 16.
Reciprocal devaluations would hurt the global economy, Ulyukayev said. Aso said on a television program on Feb. 3 that his government isn’t aiming to depreciate the yen, and weakness in the currency is a result of policies aimed at getting Japan out of a deflationary recession.
European Central Bank governing council member Jens Weidmann last month warned against “politicizing” the yen exchange rate.
Michael Meister, the parliamentary finance spokesman for German Chancellor Angela Merkel’s party, said that Japan risks retaliatory action by G-20 nations.
bloomberg.com
Aso told reporters in Tokyo today that the decline has been too rapid, after earlier telling lawmakers the government hadn’t anticipated a rapid move to around 90 per dollar.
The yen slumped 13 percent since mid-November in anticipation of the greater monetary stimulus advocated by Shinzo Abe, who took office as prime minister in December.
The yen’s drop spurred criticism abroad, with Aso’s South Korean counterpart complaining about the risk to his nation’s exports and Russia last month warning about the potential for reciprocal action to drive down exchange rates.
Finance ministers and central bank governors from the Group of 20 nations are scheduled to meet in Moscow next week.
“Aso may be trying to cool the market’s momentum as European authorities are criticizing Japan’s policies,” said Junko Nishioka, chief economist at RBS Securities Co. in Tokyo and a former BOJ official.
“His comments seem to be inconsistent: one moment he’s talking down the yen, the next he’s talking it up.” The yen was up 1 percent at 92.65 per dollar as of 10 a.m. in London.
It earlier rose as much as 1.6 percent, the biggest advance against the dollar since March 17, 2011, after Aso said in Parliament that “the yen’s sudden move from 78 or 79 to 90 was not something we anticipated.”
Stock Rally
Abe won December’s election pledging to end deflation and revive the economy.
Companies from Toyota Motor Corp. to Nissan Motor Co. have soared in recent weeks with the yen’s retreat, and economists at banks from Goldman Sachs Group Inc. to Nomura Holdings Inc. have boosted their projections for growth this year.
The Topix index of shares today posted its 13th straight weekly advance.
“The question remains, however, how this verbal intervention will be viewed by the G-20 ministers,” said Callum Henderson, global head of foreign exchange research at Standard Chartered Plc in Singapore.
The world’s leading economies are on the brink of a “currency war” to keep up with Japan and use devaluation to boost their competitiveness, Russian central bank First Deputy Chairman Alexei Ulyukayev said at a conference in Moscow Jan. 16.
Reciprocal devaluations would hurt the global economy, Ulyukayev said. Aso said on a television program on Feb. 3 that his government isn’t aiming to depreciate the yen, and weakness in the currency is a result of policies aimed at getting Japan out of a deflationary recession.
European Central Bank governing council member Jens Weidmann last month warned against “politicizing” the yen exchange rate.
Michael Meister, the parliamentary finance spokesman for German Chancellor Angela Merkel’s party, said that Japan risks retaliatory action by G-20 nations.
bloomberg.com
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