Aso tight-lipped on fresh yen losses

[TOKYO] Japanese Finance Minister Taro Aso on Tuesday refrained from commenting on renewed weakness in the yen, after issuing a warning last week about its slide.

Mr Aso said on the sidelines of a Group of Seven finance leaders' gathering last week that recent declines in the yen had been "rough." The remark was stronger than mild warnings by other Japanese policymakers that while excessive turbulence was unwelcome, the yen's declines so far had not reached alarming levels.

The dollar has continued its ascent since then, hitting a fresh 12-1/2-year high of just below 125 yen on Monday as investors bet that US interest rates would rise later this year while Japanese monetary policy remains ultra-loose.

Asked on Tuesday about how the yen continued to decline even after his warning, Mr Aso said: "As a finance minister, I do not comment on currency moves ... Back then, I only said the moves were rough." "I will only repeat the same thing, which is that we must continue to watch currency moves carefully," he told a news conference after a regular Cabinet meeting.

Japan's export-reliant economy has historically suffered from a strong yen, so many policymakers have welcomed limited yen declines.

But some economics and politicians have begun to worry about the drawbacks, such as boosting import costs and eroding consumers' purchasing power, which could outweigh benefits to exporters.

REUTERS