TOKYO, Sept 28: Japanese Finance Minister Jun Azumi said on Friday his successor is likely to talk about the risks that Japan is facing from a strong yen at a Group of Seven finance ministers’ meeting next month, as the country’s economic recovery loses momentum.
Azumi told reporters he hopes the new finance minister will also discuss the yen at the G7 meeting and meetings of the International Monetary Fund, which will be held in Tokyo.
It is still uncertain what assurances Japan can expect to receive about the yen, but its persistent strength has been a side-effect of the crises that have plagued the global economy in recent years, as investors tend to favour it as a safe haven in times of market turmoil.
‘The yen is high by historical standards,’ Azumi said.
‘I am sure the new finance minister will talk about the yen and Japan’s economic outlook at various meetings. I think it is necessary to explain the demerits of a strong yen.’
His comments came as data showed Japan’s industrial output fell to a 15-month low in August, hit by sagging sales in its top export market China and the confidence-sapping euro zone crisis, fuelling concerns that the world’s third-largest economy could slip into recession later this year.
Finance ministers from G7 countries will meet on Oct. 11 in Tokyo, according to several European officials.
The meetings will take place on the sidelines of separate meetings for the International Monetary Fund and World Bank.
Japan intervened and sold the yen about a year ago after it reached a record high versus the dollar, but since then the yen hasn’t weakened as much as some policymakers and Japanese exporters had hoped.
Major economies tend to discourage foreign exchange intervention in favour of free-floating currencies.
However, earlier this year the IMF said the yen is moderately overvalued, raising hopes among some in Japan that overseas officials are becoming more sympathetic to Japan’s complaints about the yen’s gains.
Azumi is to give up his post and become acting secretary-general of the ruling Democratic Party as Prime Minister Yoshihiko Noda makes personnel changes to prepare for an election expected in the coming months.
Noda has yet to announce who will replace Azumi as finance minister.
(AGENCIES)
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