“Very rapid” gains in the yen are “counter-productive” and Japanese officials are closely monitoring the foreign-exchange market, the nation’s top currency official said.
“The disorderly and speculative movement of any currency is not constructive” for economic growth, Vice Finance Minister Takehiko Nakao said in an interview yesterday in Hong Kong, where he’s attending a meeting of the Financial Stability Board. This is especially so for Japan as the nation recovers from last year’s earthquake and tsunami, he said.
The yen has climbed about 5 percent against the dollar from this year’s low in mid-March, weighing on export sales and profits for manufacturers as the government seeks to sustain a rebound in the world’s third-biggest economy. Nakao said that the finance ministry will take action if necessary, suggesting that the door is open to further government intervention to weaken the currency.
Last year, Nakao oversaw interventions that helped to pull the yen back from a post-World War II high of 75.35 against the dollar. The currency was at 79.51 as of 9:43 a.m. in Tokyo.
Nakao called for euro region nations to support their system, adding that Japan didn’t want to see a Greek exit.
European Central Bank Governing Council member Ewald Nowotny said yesterday that the “prime objective” is to keep Greece in the euro area, adding that this is “something that doesn’t only depend on the side of the European authorities, but also on the decisions of Greek people and their government.”
In Japan, a report yesterday showed that the jobless rate rose for the first time in three months, exceeding analysts’ estimates and underscoring concern that the recovery will lose momentum in the face of gains in the yen and Europe’s crisis.
Sony Corp. (6758) is among manufacturers to have announced job cuts.
Nakao took the role made famous by Eisuke Sakakibara, the official who became known as Mr. Yen, in August last year.
He said yesterday that Japan’s economy may grow more than 2 percent this fiscal year as earthquake reconstruction bolsters demand. Gains in consumer spending helped to drive an annualized 4.1 percent expansion in the first quarter after a 0.1 percent advance in the final three months of 2011.
A sovereign-rating cut by Fitch Ratings this month underscored the challenge for the government of sustaining growth without worsening the nation’s finances. Japan has the world’s biggest public debt burden.
To contact the reporter on this story: Stephanie Tong in Hong Kong at firstname.lastname@example.org
To contact the editor responsible for this story: Paul Panckhurst at email@example.com