[The Dollar to Yen exchange rate (USD JPY) as of 11 Sep 2022 at 1:56 AM: 1 USD = 142.5051 JPY]
The Japanese yen strengthened toward 142 per dollar after hitting a 24-year low of almost 145, as authorities said they are ready to take action if the currency’s rapid decline remains volatile.
Repeating authorities’ warnings about the currency’s slide to 2 dozen-year lows, deputy chief cabinet secretary Seiji Kihara said on Sunday that Japan’s government must take steps as needed against excessive declines in the yen,,.
“As for excessive, one-sided currency moves, we will closely watch developments and must take steps as needed,” Kihara told a television programme when asked about the yen’s recent falls.
The yen has recently fallen so much against the dollar, as investors focus on the widening divergence between the U.S. Federal Reserve’s aggressive interest rate hikes and the Bank of Japan’s (BOJ) pledge to maintain ultra-low rates.
“I won’t comment on monetary and interest-rate policy, as they fall under the jurisdiction of the BOJ,” Kihara said.
The government will consider “in the not so distant future” steps to further open Japan’s borders to overseas visitors, such as by scrapping a cap on the daily number of entrants, added Kihara.
According to Kihara, a weak yen is most effective in attracting inbound tourism and further steps must be taken to draw in more foreign tourists into the country.
Japan eased border controls from Sept. 7 by raising the ceiling for daily entrants to 50,000 and freeing entry for travellers on package tours without the need for guides. read more
Scrapping the ceiling and allowing more travellers would be crucial to attract foreign money into Japan and revive its fragile economy, according to financial analysts.
Kihara also said he would not rule out issuing government debt on how to finance an expected increase in Japan’s defence spending. “We’ll be flexible on the funding and won’t rule out any options,” he said.
The government, in a policy roadmap released in June, said that it wanted to drastically increase defence spending “within the next five years,” highlighting Tokyo’s interest in boosting defence at a time of tension with its powerful neighbour China.