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Japan must do something against ‘excessive’ yen moves

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Economy 7 hours ago (Sep 11, 2022 07: 45AM ET)

Japan must take steps against 'excessive' yen moves - govt spokesman Reuters. FILE PHOTO: A Japan yen note sometimes appears in this illustration photo taken June 1, 2017. REUTERS/Thomas White/Illustration/File Photo

By Leika Kihara

TOKYO (Reuters) -Japan’s government must do something as had a need to counter excessive declines in the yen, a senior government official said on Sunday, because the currency slides to its weakest level contrary to the dollar in 24 years.

The comments from Seiji Kihara, the deputy chief cabinet secretary of Prime Minister Fumio Kishida’s government, will be the latest to highlight authorities’ deep concern concerning the yen’s slide.

Kihara also said the federal government will consider “in the not distant future” relaxing strict border measures to help expand open Japan’s borders to overseas visitors, such as for example by scrapping a cap on the daily amount of entrants.

“For excessive, one-sided currency moves, we shall closely watch developments and must do something as needed,” Kihara told a television programme, when asked concerning the yen’s recent falls.

The yen has been hammered contrary to the dollar as investors concentrate on the widening divergence between your U.S. Federal Reserve’s aggressive interest hikes and the lender of Japan’s (BOJ) pledge to keep ultra-low rates.

“I will not touch upon monetary and interest-rate policy, because they are categorized as the jurisdiction of the BOJ,” Kihara said.

The federal government is considering scrapping the cap on people to Japan by October, the newspaper reported on Sunday. The federal government would also remove current restrictions on visitors that are not on package tours, the Nikkei said without citing the foundation of its information.

“A weak yen is most reliable in attracting inbound tourism,” Kihara said, adding that further steps should be taken to attract more foreign tourists in to the country.

Japan eased border controls from Sept. 7 by raising the ceiling for daily entrants to 50,000 and freeing entry for travellers on package tours with no need for guides.

Analysts say scrapping the ceiling and allowing more travellers will be imperative to attract foreign money and revive the fragile economy.

On how best to finance an expected upsurge in Japan’s defence spending, Kihara said he’d not eliminate issuing government debt.

“Our goal would be to drastically strengthen Japan’s defence by tapping various resources of revenue. We’ll be flexible on the funding and won’t eliminate any options,” he said.

In an insurance plan roadmap released in June, the federal government said it wished to drastically increase defence spending “next five years,” highlighting Tokyo’s fascination with boosting defence at the same time of tension using its powerful neighbour China.

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