MEXICO CITY (Reuters) - Japan said its concerns that a strong yen is hurting exports and growth won tacit support from other Group of 20 countries at a weekend meeting that focused on debt problems in Europe and the United States.
Japan has long argued that one of the unwanted side effects of the euro crisis was capital flight to the relative safety of the yen, driving it beyond levels exporters can cope with and threatening its economic recovery from last year’s earthquake.
Finance Minister Koriki Jojima said he again raised Japan’s concerns at the meeting of G20 finance chiefs in Mexico City.
“I told them that the strong yen persists in spite of the fact that Japanese economic fundamentals are not solid and that it poses a major downside risk to the Japanese economy,” Jojima told reporters late on Sunday. “There weren’t any particular objections and I took that as showing other countries understand our concerns on currencies.”
Japanese officials have said they would consult with other countries on currencies but they have not ruled out intervention in the currency market if Japan does not get support from others.
The dollar traded at around 80.26 yen on Monday. It has been trading largely in a tight range of 77 to 79 yen in recent months, not far above its record low of 75.31 hit last October when Japan intervened heavily in the currency market.
However recent soft Japanese data and corporate earnings weighed on the yen, with third-quarter economic output data, due on November 12, likely to show a contraction.
Jojima urged the G20 to stick to a statement, issued in June at a summit meeting, talking of adverse effects of excess currency market volatility. Japan has interpreted that as tacit approval for Tokyo’s efforts to counter the strong yen.
Japan had long enjoyed a hefty trade surplus led by exports of cars and electronics, but its trade balance swung to deficit last year for the first time in decades when the nuclear crisis triggered by the March 2011 earthquake pushed up import bills for energy resources. The global slowdown and safe-haven fund flows to the yen have also hurt the export-reliant economy. (Editing by James Dalgleish)