Japanese Finance Minister Taro Aso said his counterparts and central bank governors from Group of 20 nations had no criticism over the yen’s weakness after it depreciated about 30 percent under Prime Minister Shinzo Abe.
“None,” Aso told reporters when asked if he faced any criticism on the currency after the G-20 meeting Friday in Washington. At the joint press briefing, Bank of Japan Governor Haruhiko Kuroda said the G-20’s view on monetary policy is consistent with the BOJ’s unprecedented easing.
The U.S. Treasury Department this month said Japan should avoid “over-reliance” on monetary stimulus without fiscal policy and structural reforms or risk putting Japan’s escape from deflation at risk. The G-20 on Friday reaffirmed “previous exchange-rate commitments,” referring to a pledge of the past two years not to weaken currencies for competitive purposes.
“Japan’s goal at the G-20 meeting is to receive no complaints about the yen,” Hiromichi Shirakawa, chief Japan economist at Credit Suisse Group AG, said before the G-20 meeting. “Japan can’t afford to lose a weak yen to combat deflation.”
The yen has fallen about 29 percent since Abe took office in December 2012. The currency touched 122.03 per dollar on March 10, a 7 1/2-year low.
“Over-reliance on monetary policy without appropriate support from fiscal policy and structural reforms will put Japan’s recovery and escape from deflation at risk and could generate negative spillovers,” according to the Treasury’s semiannual report on currency policies released on April 9.
The weaker yen has boosted profits at Japanese exporters from Toyota Motor Corp. to Hitachi Ltd., while adding to costs for importers and smaller companies. The Nikkei 225 Stock Average rose to a 15-year high last week.
Koichi Hamada, an economic adviser to Abe, said Tuesday selling of yen is coming closer to its limit and 105 yen per dollar would be appropriate. Deviations of as much as 20 percent from that level would be acceptable, he said.