On the 26th, Finance Minister Shunichi Suzuki reiterated his intention to closely monitor foreign exchange market trends and take all possible measures to address the depreciation of the yen, which has fallen to the 155 yen level to the dollar for the first time in 34 years. He held a press conference after the cabinet meeting.
Finance Minister Suzuki said, “I cannot comment on the timing or specific policy measures” of foreign exchange policy, but added, “We will continue to closely monitor trends in the foreign exchange market and take all possible measures.” . When asked about the necessity of responding to the weaker yen, he said, “I cannot comment.”
Regarding the impact of the weak yen on the Japanese economy, he explained that there are both positive and negative aspects. He said that countermeasures against soaring prices are currently an important policy issue, adding, “I have concerns about the negative aspects.”
At a subsequent meeting of the House of Representatives Finance and Financial Services Committee, it was pointed out that the reason for the weak yen was that the government was conscious of the difference in interest rates between Japan and the United States. Although exchange rate levels are formed by a complex mix of factors such as price trends, economic indicators, market participants’ sentiments, and speculative movements, it is difficult to judge how long the current monetary policy will continue in Japan and the United States. He said he thought it would depend on the situation.
On the morning of the 26th, the yen exchange rate remained in the high 155 yen range.While pressure to sell yen and buy dollars persists due to the difference in interest rates between Japan and the U.S., the Bank of Japan has announced that it will consider ways to reduce its purchases of government bonds. News reports are supporting the yen. The yen has been selling off slightly since the release of the Tokyo consumer price index for April, which was lower than market expectations. In overseas markets on the 25th, the price at one point hit 155.75 yen, the lowest price since June 1990.
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(Updated with remarks made at the House of Representatives Finance Committee)
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