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2010年8月14日 (土)

円急騰 政府・日銀は為替安定へ動け

The Yomiuri Shimbun (Aug. 14, 2010)
Govt, BOJ must do more to stem yen's rise
円急騰 政府・日銀は為替安定へ動け(8月13日付・読売社説)

There has been no sign of an end to the strong yen and weak dollar, due to widespread concerns about a possible slowdown in the U.S. economy in recent days. The government and the Bank of Japan should increase their cooperation in taking flexible steps to stabilize the yen's value.

In early Thursday trading, the U.S. dollar temporarily dropped to the 84 yen level in Tokyo, its lowest against the yen since 1995. The yen's value reached an all-time high in that year, with the U.S. currency traded in the 79 yen range.
The rapid surge in the yen's value, if it continues unabated, could bring it close to yet another record high. As things stand today, the yen is the sole major currency whose value has not stopped increasing, as illustrated by its continued rise against the euro.

The yen's sharp advance could undermine the slight recovery in the economy, diminishing profits gained by carmakers, electronic manufacturers and other exporting companies whose business performance is beginning to improve at long last.

There are concerns that the fall in import prices that inevitably accompanies a strong yen could further prolong this country's deflation.

Fed move sends stocks down

On Thursday, Tokyo stocks sharply fell as investors were unnerved by the accelerated appreciation of the yen. The exchange rate fluctuations that may follow must be vigilantly watched.

The rapid rise in the yen's value can be attributed to the U.S. Federal Reserve Board's decision Tuesday to effectively conduct additional monetary easing after significantly lowering its forecast for the U.S. economy.

The Fed's decision seeks to underpin the economy through measures aimed at lowering long-term interest rates but not reducing the money supply to the market. The latest move also may signify an attempt by the Fed to preemptively contain growing deflationary concerns in the United States.

However, the market has become even more cautious about an anticipated business slowdown, as indicated by the worsening employment situation and slumping personal consumption. Combined with speculation that the drop in U.S. interest rates will reduce the gap between Japanese and U.S. interest rates, this has encouraged dollar selling.

Market players are apparently buying the yen after weighing the stability of each major currency and concluding the yen is relatively stable and therefore the best buy once potentially precarious currencies are eleminated from the list of viable choices.

The Fed's new easy credit policy is not without concerns. Many market players feel there is a limit to what can be accomplished to shore up the U.S. economy through the additional monetary easing.

U.S. seems at impasse

President Barack Obama's administration has good reason to feel hesitant about implementing a new economy-boosting package if it stops to think about the nation's federal deficit. The U.S. government seems to find itself at an impasse, not knowing what kind of measures should be implemented to overcome the situation.

With these problems in mind, U.S. authorities are poised to allow the weak dollar--an obvious boost for the U.S. export drive--to continue for the foreseeable future. They hope U.S. exports will prop up the country's economy.

Such is also the case with European nations, some of which are experiencing fiscal crises. These countries seem to rely on drops in their currencies' values as a means of underpinning their respective economies.

All this is in stark contrast to the failure of the Japanese government and the Bank of Japan to take appropriate measures.

On Tuesday, the central bank decided to maintain its current monetary policy. However, we believe there is a pressing need to consider additional measures to deal with the ongoing situation, including the expansion of its quantitative relaxation. The bank lacks a sense of urgency.

The Economy, Trade and Industry Ministry has said it will put together a report detailing how the strong yen has affected corporations it will survey by the end of the month. However, the ministry has been slow to make this decision.

The government and the Bank of Japan should not hesitate to intervene in the exchange market and stem the sharp rise in the yen's value.

(From The Yomiuri Shimbun, Aug. 13, 2010)
(2010年8月13日01時32分  読売新聞)


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