Japan Yen hits 140 to Dollar: Kishida is a bystander

Japan Yen hits 140 to Dollar: Kishida is a bystander

Sawako Uchida and Sawako Utsumi

Modern Tokyo Times

The Japanese Yen was 110 to the Dollar when Prime Minister Fumio Kishida took power. Now, the Yen is 140 to the Dollar. However, despite the sharp currency decline, the Kishida administration is patiently watching like a bystander.

The Yen to the Dollar rate of 140 was last reached in August – over 24 years ago. The huge fluctuation isn’t good for the business community, on the whole – even if you always have winners and losers. Therefore, what level does the Kishida administration deem problematic before intervening – 145, 150, or even higher (even if this figure isn’t reached)?

Jerome Powell, the Federal Reserve Chairperson in America, uttered, “Restoring price stability will likely require maintaining a restrictive policy stance for some time.”

The BBC says, “The Bank of Japan has maintained its ultra-low interest rates to support economic recovery, and this is one of the reasons the yen has fallen in value against the US dollar and other major currencies.”

Shunichi Suzuki, Japanese Finance Minister, said, “Excessive, disorderly currency moves could have a negative impact on the economy and financial conditions.” 

Modern Tokyo Times recently said, “The Bank of Japan (BOJ) is in a permanent debt-related straightjacket: while the European Central Bank (ECB) is feeling the convulsions of sanctions on the Russian Federation. Hence, the Euro and Yen continue to decline against the Dollar – with few options being available to the BOJ to ease the concerns of major importers.”

Haruhiko Kuroda, the Governor of the Bank of Japan (BOJ), reiterated that a substantial rate increase would be needed to halt the significant decline of the Yen. This would only hurt the economy of Japan – insists Kuroda.

Kuroda said, “We have no choice other than continued monetary easing until wages and prices rise in a stable and sustainable manner.”

The Washington Post reports, “In the United States, the Fed has been aggressively raising interest rates, pushing yields on Treasury bonds higher, and making the greenback more attractive to investors than the euro. America’s central bank has raised rates three times in 2022 and has signaled that it has four more increases planned as part of its strategy to bring inflation under control.”

Lee Jay Walker says, “Even if Kishida does have a Yen to Dollar rate that he deems problematic, the aftershocks on debt repayments await if interest rates spiraled. Hence, it seems that any hike in interest rates would be minimal under the prevailing conditions. This says much about the Japanese economic straightjacket.”


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