Japan Has Tools To Smooth Out Yen Moves, Says Ex-Finance Ministry Exec
Date
10/31/2022 9:07:41 PM
(MENAFN- Trend News Agency) Japanese authorities cannot control yen levels with currency
intervention but they have various tools to smooth out volatile
moves driven by speculators, former top finance Ministry bureaucrat
Yasushi Kinoshita said on Monday, reports citing .
Japan has been conducting yen-buying interventions since
September to prevent a sharp slide in the currency driven by the
gap between steadily tighter U.S. monetary policy and the bank of
Japan's continued ultra-loose policy.
'Currency intervention cannot and isn't intended to move the yen
significantly up and down, or keep it at a certain level for a
sustained period of time,' said Kinoshita, seen as a candidate to
join the Bank of Japan's leadership next year.
'Rather, it's aimed at preventing speculators from triggering
volatile moves,' said Kinoshita, who played a key role when Japan
conducted yen-selling intervention in 2011.
'Japanese authorities are armed with the wisdom and various
tools to fight speculators,' he told Reuters in an interview.
Kinoshita said the central bank must eventually exit its
ultra-loose policy but added that the BOJ must tread carefully and
coordinate closely with the government in withdrawing stimulus.
'Everyone understands the BOJ must eventually head for the
exit,' Kinoshita said.
'It must proceed steadily but cautiously,' he said, as
withdrawing fiscal and monetary support simultaneously and too
hastily would hurt the fragile economy.
Kinoshita, who retains close ties with incumbent policymakers,
served as vice finance minister for about a year from 2013, when
BOJ Governor Haruhiko Kuroda deployed his 'bazooka' stimulus
programme to eradicate deflation.
He is seen as one candidate to join the BOJ's leadership when
Kuroda's term ends next April and those of his two deputies run out
in March.
Some investors bet the BOJ will start to phase out its massive
stimulus upon dovish governor Kuroda's departure, as prolonged
ultra-low rates drive unwelcome yen falls that boost import
costs.
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