Japanese government concerned by yen's rapid fall against dollar

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IANS | 22 Nov, 2014
Japanese Finance Minister Taro Aso Friday expressed concern over the sharp depreciation of the yen against the dollar this week, and said abrupt movements in the foreign exchange market were not beneficial to the Japanese economy.

"The yen's depreciation against the dollar over the past week has been too rapid," Aso told reporters after the yen fell Wednesday from 116 to 118 to the dollar for the first time in seven years and three months.

The US currency has climbed 15 percent against the Japanese yen since August.

Aso's comments come at a time when the government is drawing up a plan to stimulate economic recovery that will include support measures for families and small and medium-scale industries.

All of those sectors have been negatively affected by the yen's depreciation, which has made imports more expensive, and by the sales tax hike that took effect in April.

Aso also said that the government would prepare a stimulus package by the end of this year and would form a separate budget line, which would be introduced in parliament early 2015, to finance the package.

Between July and September, Japan's gross domestic product fell,for the second consecutive quarter on account of the slump in demand that followed the sales tax hike.

Prime Minister Shinzo Abe earlier this week postponed another sales tax hike which had been scheduled for October 2015.

He also dissolved the lower house of the parliament and called for snap polls Dec 14 as he seeks to strengthen his mandate and implement his economic strategy of aggressive stimulus packages, popularly known as “Abenomics”, without hindrance.