© . FILE PHOTO: A Japanese yen note can be seen in this illustration photo, taken June 1, 2017. REUTERS/Thomas White/Illustration By Tetsushi Kajimoto and Kentaro Sugiyama TOKYO () – A senior Japanese government official said on Wednesday there was no “good or bad” in exchange rates, in comments suggesting Tokyo was not ready to take immediate action to support the weakening yen. In an interview with , Deputy Cabinet Secretary Seiji Kihara echoed the authorities’ common refrain that sharp moves in exchange rates were undesirable and that the government would closely monitor the impact of a softer yen on the economy. Asked about growing concerns that the declining yen was problematic for Japan — including from its own finance minister, Shunichi Suzuki — Kihara said, “There is no such thing as good or bad” in exchange rates. “Stability is important.” A weak yen, once a boon to the export-driven economy, has now increased import costs, especially for fuel during the war in Ukraine. That threatens to derail Japan’s weak economic recovery as rising prices hit consumers and businesses. The dollar at one point hit a new two-decade high to the yen of 129.43 yen on Wednesday, compared to about 114 yen in early March. Some investors said a drop of more than 130 yen could be a trigger for authorities to step in to support the currency. But others doubt that such operations could halt the downtrend for long as the US Federal Reserve is about to tighten policy and the Bank of Japan (BOJ) is determined to keep its policy super-easy for a while. BOJ Governor Haruhiko Kuroda, who has long argued that a weak yen was positive for the economy as a whole, amended his comments this week to warn that the yen’s sharp weakening was negative. When asked whether the central bank should reverse its massive stimulus and raise interest rates to boost the yen, Kihara declined to comment. Instead, he said it was up to the central bank to choose what tools were available to meet its 2013 joint statement with the government, including a 2% inflation target. Kihara declined to speculate on the reasons behind the yen’s weakness and whether the current moves were fast enough to warrant action by authorities. He said he was not in a position to answer as it was up to the currency authorities to act appropriately on a daily basis. Intervention with buying yen has been very rare. The last time Japan intervened to support its currency was in 1998 in the wake of the Asian currency crisis. Japan has steered clear of the market since 2011, when it intervened heavily to contain the strength of the yen after the devastating earthquake triggered a nuclear crisis.
