Economy minister tries to slow rapid fall in value of yen
Japan’s economy minister surprised markets yesterday by warning of the potential ill effects of a sharply weaker yen in a rare rhetorical departure from years of attempts by Tokyo to talk the currency down.
“If the yen becomes too weak, import costs will jump and there would be a negative impact on people’s lives,” Akira Amari said.
“I hope it will stabilise at a level that is best for the public good.”
Foreign exchange traders said the comments might have been an attempt to slow the rapid depreciation of the yen, which has fallen 13 per cent in a little over two months.
This fall is in anticipation of the economic policies promised by the Liberal Democratic party and its leader, Shinzo Abe, in the run-up to its victory in elections in December.
Investors, however, said the comments were unlikely to derail what has become one of the most popular trades in the global forex market.
Bets that the yen will weaken sent the currency to its lowest level against the US dollar since the summer of 2010. – (The Financial Times Limited 2013)