Finance Minister Taro Aso on Friday expressed wariness about the sharp depreciation of the yen against the U.S. dollar this week, saying rapid moves in the foreign exchange market are “not desirable” for the Japanese economy.
“It is clear that the pace of the yen’s drop against the dollar this week is too fast,” Aso said at a press conference, adding the yen’s sharp fall would push up import costs, which in turn would drag down the economy.
The U.S. dollar climbed above 118 yen Wednesday for the first time in more than seven years, rising from the lower 116 yen range late last week. The yen has been on a rapid downward path since the Bank of Japan decided to implement additional monetary easing measures on Oct. 31.
Aso’s remarks come as Prime Minister Shinzo Abe has pledged to map out an emergency economic stimulus package, amid intensifying fears that the negative impact of the weaker yen will deal a heavier blow to the country’s already sluggish economy in the run-up to the general election in December.
Aso, concurrently serving as deputy prime minister, indicated that the government’s stimulus package will include some steps that could sufficiently support households and smaller companies that have been suffering rising prices triggered by the April 1 consumption tax hike and the yen’s decline.
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