Japan will continue to assess economic impact of stronger yen, finance minister says

JAPAN Finance Minister Shunichi Suzuki said on Tuesday the government will continue to analyse the impact of the strengthening yen on the economy and respond appropriately.

“Our stance has been that currency rates should be determined by markets reflecting fundamentals, but rapid fluctuations are not desirable,” Suzuki said, speaking in a regular post-cabinet meeting news conference.

The US dollar fell to a more than one-year low versus the yen, trading below the key 140 mark on Monday on speculation the Federal Reserve could deliver a 50-basis-point interest rate cut at its policy meeting this week.

Suzuki said the stronger yen could affect the economy both positively and negatively through various channels, such as overseas sales of exporters and import costs on households and businesses.

He noted that the yen has been trading above an average 145 to the dollar that Japanese firms assume for the second half of the fiscal year, but their earnings and financial conditions have been generally healthy.

“In the meantime, we will continue to accurately analyse the impact of foreign exchange fluctuations and price movements on the economy and people’s lives and respond appropriately,” he said. REUTERS