Quotes: US MENA   Enter Symbol: NewsLetter: Search: advanced

Japan's forex diplomat rejects 'currency war' criticism  Join our daily free Newsletter

MENAFN - AFP - 24/01/2013

No. of Ratings : 0
Add to Mixx!


(MENAFN - AFP) Japan's top financial diplomat has rejected claims that the country's new government orchestrated a drop in the yen, which critics have warned could spark a global currency war.

"Japan has no intention whatsoever of competitive devaluation of the yen," Takehiko Nakao, vice minister of finance for international affairs, said in an interview with the Wall Street Journal published Thursday.

"Let me reiterate that the recent depreciation of the yen should be regarded as a correction from the one-sided and excessive appreciation that took place up to last year."

Nakao also said policy moves from the Bank of Japan this week -- including an open-ended easing programme similar to one launched by the US Federal Reserve -- was not part of a plan to manipulate the unit.

The new measures, which include setting a two percent inflation target, were aimed at tackling Japan's long-running deflation and breathing life into the world's third-largest economy, the minister said.

"It shouldn't be criticised even if a monetary policy -- which aims at ensuring growth and price stability of any country -- has a certain impact on exchange rates as a consequence," he was quoted as saying.

The Japanese currency soared to a record high around the 75-level on the dollar in late 2011 and remained strong through much of 2012, hammering exporters as the disaster-struck country struggled to cement a recovery.

Japanese authorities have intervened in currency markets on several occasions in a bid to tame the unit's surging value, with little success.

But the currency started a rapid decline after Japan's new conservative government swept to power last month on a promise to fix the economy with big spending and to pressure the Bank of Japan into more aggressive easing, which tends to weigh on the unit's value.

This month, the yen's steep tumble has sparked criticism from the head of the US Federal Reserve Bank of St. Louis, a Russian central banker who warned over a global currency war and the head of Germany's Bundesbank.

On Monday, Jens Weidmann said the result of government meddling in central bank policies, citing Japan as an example, "could be a much stronger politicising of exchange rates".

"Up to now the international monetary system has weathered the (financial) crisis and avoided a devaluation race and I hope very much that will remain the case," he added.

The monetary easing policies undertaken by the central banks of numerous industrialised countries during the crisis, primarily aimed at unfreezing financial markets, have also tended to lower the value of their currencies.

A number of emerging nations such as Brazil were unhappy and spoke of "currency wars" that would see nations work to bring down the value of their currencies, possibly for trade gains.

China has been a regular target of criticism that it manipulates the value of its yuan currency to prop up the country's export-heavy economy.

The yen weakened in late Tokyo trade on Thursday, with the dollar at 89.33 yen, from 88.56 yen in New York late Wednesday, while the euro bought 118.81 yen, from 118.00 yen in US trade.


  MENA News Headlines

Click to Apply



Middle East North Africa - Financial Network

MENAFN News Market Data Countries Tools Section  

Middle East North Africa - Financial Network

Main News
News By Industry
News By Country
Marketwatch News
UPI News
Comtex News

IPO News
Islamic Finance News
Private Equity News

How-To Guides
Technology Section

Travel Section

Search News

Market Indices
Quotes & Charts

Global Indices
Arab Indices

US Markets Details


Oil & Energy

Currencies Cross Rates
Currencies Updates
Currency Converter

USA Stocks
Arab Stocks

Saudi Arabia 

Investment Game
Economic Calendar
Financial Glossary

Portfolio Tracker


Financial Calculators

RSS Feeds [XML]

Corporate Monitor


Real Estate
Submit Your Property

Arab Research
Buy a Research

Press Releases
Submit your PR

Join Newsletters

© 2000 menafn.com All Rights Reserved.  Terms of Service | Privacy Policy | Contact Us | Advertise | About MENAFN | Career Opportunities | Feedback | Help