Japan government hopes Bank of Japan takes ‘necessary’ action on yen, inflation

JAPAN’S government hopes the central bank takes “necessary measures appropriately” in light of the yen’s recent sharp falls and rising cost of living, Chief Cabinet Secretary Hirokazu Matsuno said on Wednesday.

The top government spokesperson also reiterated Tokyo’s readiness to take appropriate action in the currency market, when asked about the yen’s decline to a fresh 24-year low.

“We hope the Bank of Japan (BOJ) continues to coordinate closely with the government, and take necessary measures appropriately,” Matsuno told a regular news conference.

The remark comes ahead of the BOJ’s two-day policy meeting that ends on Friday.

While the BOJ is widely expected to keep its ultra-low interest rate targets unchanged, the central bank is facing heat for the dovish policy that is driving down the yen, and boosting the cost of raw material imports.

“Excess volatility and disorderly market moves have negative effects on the economy,” Matsuno said, adding that Japan will respond as needed while closely communicating with its G-7 counterparts. He declined to comment on whether Tokyo will intervene in the currency market to stem further yen falls.

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Expectations of aggressive US interest rate hikes have heightened prospects of widening US-Japan yield differentials, pushing down the yen to a fresh 24-year low of 135.58 per dollar on Wednesday. REUTERS