Finance Minister Taro Aso expressed concern Tuesday about sharp currency moves as the U.S. dollar hit its highest level in nearly six years against the Japanese yen.
“A sharp rise in the foreign exchange rate means there is a high possibility that the rate will also fall steeply, so it is desirable that the rate moves moderately,” Aso said at a press conference.
Economic and fiscal policy minister Akira Amari also said at a separate news conference that rapid currency fluctuations are not beneficial for the global economy.
Their remarks came after the dollar topped 106 yen for the first time since October 2008 on Monday, amid growing speculation that the U.S. central bank may raise its interest rate sooner than expected while the Bank of Japan may implement additional monetary easing, widening the interest rate gap between the two nations.
The latest data have shown that the U.S. economy is on a recovery track, but Japan’s economy is stalling as the 3-percentage-point consumption tax hike to 8 percent from April 1 is dealing a heavy blow to domestic demand.
With fears intensifying about the negative impact of the second round of the two-stage tax hike to 10 percent scheduled in October 2015, Aso emphasized that Prime Minister Shinzo Abe’s government will prepare necessary measures to shore up Japan’s economy.
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