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2010年8月27日 (金)

円高加速 政府・日銀は具体策を急げ

The Yomiuri Shimbun (Aug. 27, 2010)
Govt, BOJ should move on yen--now
円高加速 政府・日銀は具体策を急げ(8月26日付・読売社説)

There seem to be no brakes on the rise of the yen as speculators apparently take advantage of the sluggish response of the government and the Bank of Japan to the yen's appreciation.

The yen is surging, hitting a 15-year high in the 83 yen range against the U.S. dollar on foreign markets Tuesday. There are whispers in the markets that the yen could soon even reach a record high in the 79 yen range versus the dollar.

With the yen's surge set to batter the Japanese economy, the 225-issue Nikkei Stock Average dropped below the 9,000 mark Wednesday to close at the year's low of 8,845.39.

Unless the sharp appreciation of the yen is checked, business sentiment and the willingness of households to spend may cool, stalling the economy.

The government and the central bank should resolutely act to deal with this worrying situation, and consider intervening in the market to stem the yen's rise.

The recent responses of the government and the Bank of Japan have been missing the mark.

On Aug. 10, the central bank held off adding measures to expand liquidity. Soon after, the U.S. Federal Reserve Board took additional money-easing steps, triggering the latest rise in the yen.

Talks fall flat

A discussion over the telephone between Prime Minister Naoto Kan and Bank of Japan Gov. Masaaki Shirakawa on Monday, which set tongues wagging that steps would be taken to deal with the yen's rise, ended in just 15 minutes.

Contrary to what policymakers had intended, the talks ended with little substance and led to a further advance of the yen and offloading of stocks as disappointment spread among market players.

There have been striking inconsistencies in messages sent by Cabinet members to the market.

At a hastily arranged press conference Tuesday evening, Finance Minister Yoshihiko Noda indicated he would closely watch the market. He failed to offer any concrete response to the situation, which only fueled the yen's rise.

On Wednesday, Noda finally hinted the government might intervene in the market, saying, "When necessary, we will take appropriate measures."

During meetings with Democratic Party of Japan members of the House of Representatives the same day, Kan said, "We'll respond properly in the not-so-distant future."

None of this changed the tide in the financial markets.

The halfhearted response by policymakers probably has speculators believing the government will not take any specific action to stem the yen's rise for the time being.

No time to waste

The government could be keeping an ace up its sleeve, which it will play when the yen stands on the brink of rising above 80 yen to the dollar. But this is no time for the government to be sitting on its hands. We think the government should discuss in earnest the possibility of going it alone in intervening in the currency market.

The United States and European countries embrace the depreciation of their currencies against the yen. But it is difficult to put a finger on why only the yen is rising against other major currencies, despite the fact that Japan is plagued by deflation and sluggish growth.

Japan will probably not be strongly criticized by other nations even if it moves to correct the yen's excessive appreciation.

The Bank of Japan is reportedly considering taking additional money easing measures ahead of the next Monetary Policy Meeting set for early September. We hope the central bank will both check the yen's rise and stimulate the economy.

Depending on market developments, the central bank should promptly ease the money supply by holding an extraordinary meeting, rather than wait until the regular policy meeting.

(From The Yomiuri Shimbun, Aug. 26, 2010)
(2010年8月26日01時03分  読売新聞)


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