Mr Yen Says Currency Weak Enough

The 14 percent plunge in Japan’s currency since mid-year has about run its course, according to the former Ministry of Finance official known as “Mr. Yen.”

Eisuke Sakakibara, who got his nickname in the 1990s for his influence over the exchange rate, said the yen is unlikely to match its low of 124.14 per dollar on the eve of the financial crisis in June 2007. It touched a seven-year low of almost 119 last week after more than 1 1/2 years of unprecedented monetary easing by the Bank of Japan.

Sakakibara joins a growing chorus of voices that includes Finance Minister Taro Aso who figure that may be weak enough. In an interview in Tokyo, the 73-year-old said the yen will soon start to benefit as the increase in Japan’s sales tax seven months ago loosens its choking effect on the world’s third-largest economy.

“The yen doesn’t appear to be in an alarming situation where it will continue to depreciate out of control,” said Sakakibara, now a professor at Tokyo’s Aoyama Gakuin University. “The Japanese economy is not that weak, even though the negative impact of the sales-tax increase in April has been somewhat prolonged.”

via Bloomberg

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency
trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza