Yellen Fed May Pose Yen Threat to Japan, Abe Adviser Hamada Says

Photographer: Tomohiro Ohsumi/Bloomberg

Koichi Hamada, an advisor to Japan's Prime Minister Shinzo Abe, welcomed Janet Janet Yellen’s nomination, saying that her experience and expertise made her the best person for the job. Close

Koichi Hamada, an advisor to Japan's Prime Minister Shinzo Abe, welcomed Janet Janet... Read More

Close
Open
Photographer: Tomohiro Ohsumi/Bloomberg

Koichi Hamada, an advisor to Japan's Prime Minister Shinzo Abe, welcomed Janet Janet Yellen’s nomination, saying that her experience and expertise made her the best person for the job.

Janet Yellen’s nomination as Federal Reserve chairman raises the odds of prolonged U.S. stimulus that could strengthen the yen and damage the Japanese economy, said Koichi Hamada, an adviser to Prime Minister Shinzo Abe.

“Yellen probably won’t seek an exit from an accommodative policy immediately,” Hamada, a former Yale University professor, said in a phone interview from Connecticut. If the Fed lengthens stimulus, the yen may gain, hurting Japan’s recovery, Hamada said.

Hamada, 77, was one of Abe’s advisers on the creation of the reflationary policies called Abenomics and on choosing a governor for the Bank of Japan, the job taken by Haruhiko Kuroda in March this year. Today, Hamada said that Kuroda and his officials must be ready to act if a stronger yen damages the world’s third-biggest economy.

The yen tumbled about 20 percent against the dollar in the past year, helping Japanese exporters and Abe’s efforts to jolt the nation out of a 15-year deflationary malaise. The BOJ has already rolled out unprecedented stimulus.

“The BOJ doesn’t have to promise anything now, but I want them to be ready in case damage to Japan’s economy becomes clear,” Hamada said.

While Hamada has Abe’s ear, Hamada doesn’t speak for the Japanese government and Abe doesn’t always follow his advice. On Oct. 1, Abe announced that the government was pressing ahead with a sales-tax increase that Hamada opposed.

Photographer: Andrew Harrer/Bloomberg

Janet Yellen, vice chairman of the U.S. Federal Reserve. Close

Janet Yellen, vice chairman of the U.S. Federal Reserve.

Close
Open
Photographer: Andrew Harrer/Bloomberg

Janet Yellen, vice chairman of the U.S. Federal Reserve.

Hamada welcomed Yellen’s nomination, saying that her experience and expertise made her the best person for the job.

To contact the reporter on this story: Toru Fujioka in Tokyo at tfujioka1@bloomberg.net

To contact the editor responsible for this story: Paul Panckhurst at ppanckhurst@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.