As pain from weak yen deepens, Japan's ex-currency chief Kanda warns of action

By Tetsushi Kajimoto and Makiko Yamazaki

TOKYO (Reuters) - Japan will act appropriately against excess movements on the foreign exchange market, former currency chief Masato Kanda told Reuters, issuing a warning as the country continues to feel pain from a weaker yen.

Kanda, now a special adviser to Prime Minister Shigeru Ishiba and the finance ministry, said in an interview that currency market volatility had increased reflecting recent changes in monetary policies and political situations in major countries.

"There is no change to our stance that we will need to respond appropriately to excess movements on the currency market as excessive foreign exchange volatility is undesirable," he said.

Kanda's warning came as the Japanese currency weakened to a three-month low of near 155 to the dollar, edging closer to the 160 threshold that traders see as the authorities' line in the sand.

During his three-year tenure as vice finance minister for international affairs, Kanda carried out the first yen-buying intervention for 24 years in 2022 and led the biggest yen-buying intervention on record this year.

He stepped down at the end of July this year and is poised to become the next head of the Asian Development Bank.

Japan's trade no longer generates a surplus due to a surge in the cost of energy imports and an increase in offshore production, reducing the weak yen's positive impact on exports.

"We are observing a situation again where a weaker yen pushes up import costs and inflict pain on ordinary people's lives," said Kanda.

Meanwhile, he said, the falling yen no longer prompts export-oriented companies to boost exports as they don't seek to increase market share with price reductions and instead shift production abroad.

"All in all, there are more people who say the weak yen is more painful," he said.



Kanda said that, while short-term movements are vastly driven by speculation, the only solution to stem the yen's weakness in longer term is to strengthen the economy through structural reforms.

"The weak yen essentially means an outflow of wealth such as it increases expenditure for energy imports," he said.

Source: Investing.com

Останні публікації
UBS raises USD/JPY forecast, says another jump to 160 is possible
14.11.2024 - 16:00
Dollar marches on, Trump trade momentum undimmed
14.11.2024 - 15:00
Morning bid: A twist in the U.S.'s inflation tale?
14.11.2024 - 14:00
TSX futures inch up ahead of Powell's speech, US data
14.11.2024 - 14:00
European shares, dollar higher; bitcoin above $91K
14.11.2024 - 14:00
Siemens stock surges after Q4 profit beat, flags rising global risks
14.11.2024 - 13:00
Analysis-Crypto industry pushes for policy sea change after Trump victory
14.11.2024 - 13:00
Sterling squashed by dollar steamroller, traders watch out for Reeves' speech
14.11.2024 - 13:00
Burberry puts focus back on trench coats, scarves in turnaround plan
14.11.2024 - 12:00
Long-end US bond yields, European shares rise with dollar; bitcoin above $90K
14.11.2024 - 11:00
Dollar climbs to one-year peak; Powell's speech in focus
14.11.2024 - 11:00
Trump trade policy seen as wild card for US soybean farmers, opportunity for crushers
14.11.2024 - 09:00
Italy brings on board Banco BPM in $1.2 billion Monte dei Paschi stake sale
14.11.2024 - 09:00
Morning Bid: Inflation looks sticky, so bring on Powell
14.11.2024 - 08:00
D.E. Shaw takes $108 million short bet on Bayer, regulatory filing shows
14.11.2024 - 08:00

© Analytic DC. All Rights Reserved.

new
Аналіз ринку Як вплине завтра звіт NFP на курс долара США?