Kan airs strong concerns over yen's rise+

TOKYO, Oct. 15 Kyodo -
Prime Minister Naoto Kan said Friday the recent strong advance of the yen is
''alarming'' amid fears that it could further slow Japan's fragile economic
recovery.
His Cabinet members and the central bank governor also expressed their
misgivings as the Japanese currency reached overnight a new high point in more
than 15 years to the U.S. dollar.
''I think the current situation is very alarming,'' Kan told a Diet committee
when asked about the appreciation of the yen, which briefly rose to 80.88 yen
to the dollar in European trading Thursday, the highest since April 1995 and
within striking distance of its all-time high of 79.75 yen marked April 19,
1995.
Finance Minister Yoshihiko Noda told reporters, ''Our basic position has not
changed and we will curb excess volatility and take decisive action when
necessary,'' suggesting Japan could again step into the currency market to ease
wild gyrations in the yen following the intervention conducted Sept. 15, the
country's first in over six years.
A slower U.S. economic recovery and increasing expectations of additional
monetary easing by the U.S. Federal Reserve have pushed the dollar lower, Noda
added.
He also said the upcoming meetings of the Group of 20 leading economies will
discuss possible international cooperation on currency policy amid concerns
over some countries racing to intentionally undervalue their currencies and
boost exports.
The G-20, which groups both developed and emerging economies, will hold talks
of finance ministers and central bank governors next week in Gyeongju, South
Korea, before the leaders' summit next month in Seoul amid fears that some
countries' devaluation policies as well as capital flow controls could trigger
a currency war in the world.
Chief Cabinet Secretary Yoshito Sengoku said it is also necessary to look into
developments in the ''real economy'' of both advanced and emerging nations,
instead of only watching developments in the market when making decisions on
currency matters.
The yen's advance ''can be seen as abnormal,'' Economy Trade and Industry
Minister Akihiro Ohata said at a press conference, adding that the Japanese
government is planning to keep indicating it will do whatever it can.
Banri Kaieda, state minister in charge of economic and fiscal policy, told
reporters that the Japanese economy has been facing downside risks to its
growth, including the strength of the yen, which signals that the government
could downgrade its key economic assessment.
A government official said on condition of anonymity that the Cabinet Office is
set to revise downward the basic assessment in its monthly report due out
Tuesday. That would be the first downgrading in 20 months.
Bank of Japan Governor Masaaki Shirakawa also struck a pessimistic note.
Speaking at a meeting of the central bank's branch managers, he said the pace
of the country's economic recovery is ''slowing down partly due to the slowdown
in overseas economies and the effects of the yen's appreciation on business
sentiment.''
==Kyodo
2010-10-15 19:20:02


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