TOKYO (Reuters) - Japanese Prime Minister Naoto Kan and Bank of Japan Governor Masaaki Shirakawa may meet as early as this week to discuss the yen’s strength and possible responses, although likely options are seen as limited.
Japanese policymakers have sought to talk the yen down after its recent surge to a 15-year high against the dollar.
Following are recent key quotes by BOJ and government officials and business leaders.
ECONOMICS MINISTER SATOSHI ARAI, August 16, to reporters.
“As the yen has risen unexpectedly while U.S. economic growth fell short of expectations and the European economy lacked strength, we need to work with the BOJ to respond to the yen’s rise and watch whether it may prevent a self-sustaining economic recovery...
“We are discussing quite a lot with the Bank Japan what to do about the yen’s rise, and I hear the finance ministry is also exchanging various opinions with the BOJ at the working level. Our stance is to closely watch these developments.”
CABINET OFFICE PARLIAMENTARY SECRETARY KEISUKE TSUMURA, August 16, to reporters.
“There are three economic risks, namely the slowdown in overseas economies, the yen’s rise and the fading impact of policy measures, making the economic environment vulnerable on the downside. We are in a situation where we need to worry that a sustainable recovery will be nipped in the bud. We might be able to say the economy is entering a lull...
“Risks from the yen’s rise and the slowdown in overseas economies, as seen in July and August, are clearly heightening, so we need to monitor the economic outlook more closely.”
PRIME MINISTER NAOTO KAN, August 14, quoted by Japanese media.
“(The sudden strengthening of the yen) has become a bit of a concern. I want to continue watching it carefully in the future...
“I want to be sure to communicate as necessary (with the Bank of Japan).
KAN, August 12.
Quoted by Jiji news agency as telling his chief cabinet secretary that sudden yen gains were “rough.”
FINANCE MINISTER YOSHIHIKO NODA, August 12, to reporters.
“The government’s basic stance is that excessive and disorderly moves in foreign exchange rates would have a negative impact on the stability of the economy and financial markets. We must watch them with the utmost attention. In particular I’m watching currency moves very carefully and with great interest.
“I’m closely in touch with the prime minister and the chief cabinet secretary with regard to market moves. We will respond appropriately while carefully examining economic trends.
“Today the vice finance minister for international affairs exchanged views on market moves with a senior BOJ official, and we will keep close contact with each other from now on.
“I’ll refrain from commenting on intervention.
“Officials (in the finance ministry) are sharing information with officials not only in the United States but other countries at the working level ... I’m not thinking about (a teleconference with other G7 members) at the moment.
BANK OF JAPAN GOVERNOR MASAAKI SHIRAKAWA, August 12, in a statement.
“Currency and stock markets are showing big fluctuations against the backdrop of heightened uncertainty about the U.S. economic outlook.
“The BOJ will closely watch market fluctuations and their impact on the Japanese economy.
TSUMURA, August 12, to reporters.
“The yen’s rise, waning government stimulus steps and slowing overseas economies are creating uncertainty for Japan’s economic outlook.
FORMER VICE FINANCE MINISTER KAZUYUKI SUGIMOTO, August 12.
“Japan may decide to intervene if currency moves become more one-sided ... But there are doubts about whether Japan can convince the United States and Europe that the yen’s current rise is excessive.
BANK OF JAPAN EXECUTIVE DIRECTOR HIROSHI NAKASO, in charge of international affairs, August 12, to reporters.
“Rate checks are part of our intention to closely watch currency market moves.
VICE BANKING MINISTER KOHEI OTSUKA, August 11, interview.
“Currency (rates) seem to have come to something of a critical juncture. A rapid yen rise would boost deflationary factors, so the government and BOJ must act as one in considering what to do given our commitment to act against deflation.
“Considering the common sense that prevailed in monetary policy 10 to 15 years ago ... I can highly evaluate the BOJ’s efforts in meeting the challenges in a (new) policy frontier.
“The economy including currencies is ever-changing, it’s a living thing, so it’s impossible for central banks to say they cannot do more.
“The BOJ said it would not tolerate negative inflation, and that means it has virtually set inflation targeting ... While it has not achieved positive inflation, it would be meaningless to aim for a 2-3 percent inflation.
SHIRAKAWA, August 10, news conference after board meeting.
“I acknowledge that yen rises pose a downside risk to business sentiment. We need to examine the impact on the overall economy in a balanced way.
“We spent much time debating how the recent yen rise could affect business sentiment and the Japanese economy. This is an important point for us to examine ...
“No central bank in developed nations targets forex levels in managing monetary policy.
YOUR PARTY CHIEF YOSHIMI WATANABE, August 10
“There are worries about a double-dip in the U.S. economy and there is talk of monetary easing.
“As a result, the yen is surging against the dollar and could damage our economy.
JAPAN ASSOCIATION OF CORPORATE EXECUTIVES CHAIRMAN MASAMITSU SAKURAI, August 6, interview.
“Companies on average are assuming 90 yen a dollar. The dollar below 90 yen leads to considerably lower profits than their forecasts. But market intervention is internationally frowned on. It’s not something an advanced nation should do to buttress the economy.
“A strong yen hurts especially because Japanese companies have just changed gears and started taking aggressive measures in capital spending and M&As after having streamlined operations following the Lehman shock.
FORMER BOJ BOARD MEMBER TEIZO TAYA, August 6.
“Exports are already slowing, so if the yen rises further, production slows and corporate earnings fall, then it’s possible the BOJ could ease further.
“For the BOJ, the level of the dollar/yen is important. If it breaks 80 there would be a lot of complaints from businesses and the BOJ might respond. The BOJ might expand the amount of the fixed-interest rate operation. The duration could be expanded to six months, or maybe even one year to have more impact.
“There could be intervention if dollar/yen moved 3 or 4 yen in one day. Anything less and I think there’s no chance of intervention.
KAN, August 5, in parliament
“Generally speaking, the economy is picking up steadily but the jobless rate is at a high level and optimism is not warranted about the situation in other countries.
“We will closely watch how the economy is performing to decide if we need to take some kind of response.
TRADE MINISTER MASAYUKI NAOSHIMA, August 5, in parliament
“Japanese companies are now competing with Chinese and South Korean firms. In China and South Korea their currencies are linked to the dollar so in that sense they don’t face currency risks. But Japanese firms are facing huge currency risks ...
“We may need to take action in the future.
NODA, August 3, in parliament
“Forex rates are decided by markets ... I will be watching daily market moves closely. I would like to refrain from commenting on whether to intervene or not.
KAN, August 2, in parliament
“Some think the government should set an inflation target and make the BOJ decide how to achieve it. That’s one thought. In reality, the government and the BOJ already discuss issues thoroughly and generally act with the same goal in mind.
“In Japan, the BOJ law gives the central bank a certain degree of independence while also calling on it to cooperate closely with the government. The BOJ has in fact been cooperating closely with the government.
TOYOTA MOTOR CORP SENIOR MANAGING DIRECTOR TAKAHIKO IJICHI, August 4, at a news conference
“There’s a lack of visibility regarding currency movements and it’s difficult to predict how big an impact the end of Japanese subsidies will have.
Compiled by Tokyo Newsroom; Editing by Michael Watson and Edmund Klamann
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