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Japan will maintain its stance on yen intervention, keeping it as an option to counter excessive volatility, according to the country’s new top currency diplomat, Atsushi Mimura.
“Japan will act in accordance with internationally agreed commitments that exchange rates should be determined by markets, but excessive volatility or disorderly movements could negatively impact economic and financial stability,” Mimura said in an interview on Tuesday.
“It has been internationally agreed that measures such as interventions are permitted when necessary,” he added.
Already the head of the ministry’s international office, the 57-year-old Mimura became vice finance minister for international affairs on Wednesday. This position oversees Japan’s currency policy and coordinates economic policies with other countries.
Mimura’s appointment comes as the Japanese currency shows tentative signs of recovery from 38-year lows, with investors retreating from long-standing bets against the yen ahead of this week’s Bank of Japan meeting.
While a weak yen boosts exports, it has become a concern for policymakers as it increases import costs and hurts consumption.
His predecessor, Masato Kanda, led significant yen-buying interventions in 2022 and 2024 during his three years in office and was known for aggressively warning markets against pushing the yen lower.
“A change in the deputy finance minister for international affairs does not mean a change in basic policy, not only regarding foreign exchange but also on various issues, as determined by the finance ministry as an institution,” Mimura said.
He declined to comment on the current market situation, stating that such comments could have an unforeseen impact on the markets.
Mimura, however, hinted at a possible change in the style of communication with the markets.
“Communicating with the markets is extremely important,” he said. “Being always explicit is one style of communication, but not speaking can also be another way of communicating. We must avoid creating unnecessary speculation or market uncertainty, but communication can be done both by speaking and by remaining silent.”
Mimura also stated that the Finance Ministry will continue to cooperate with the Bank of Japan and the financial regulator, the Financial Services Agency, as the three entities need to be aligned on macroeconomic policy.
Mimura acknowledged that the yen’s effective exchange rate has weakened due to decades of deflation and that the only natural solution is to improve Japan’s economic competitiveness and boost the country’s growth potential.
“Growth areas may not only be limited to traditional manufacturing but also include inbound tourism, pop culture, soft culture, and other sectors,” he said.
Having spent nearly a third of his 35-year government career at Japan’s banking regulator, Mimura has extensive international expertise and connections in financial regulation.
During his three-year tenure at the Bank for International Settlements in Basel, Mimura helped establish the Financial Stability Board in the midst of the 2008-2009 global financial crisis to reform financial regulation and supervision.
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