Aso Says Japan Policy Unopposed at G-20 Meeting as Yen Falls
Japanese Finance Minister Taro Aso said that Japan’s policies went unopposed at a Group of 20 nations’ meeting in Washington, driving the yen lower in the absence of any roadblock for the nation’s monetary stimulus.
Japan explained that its easing is for price stability, Aso told reporters. Central bank Governor Haruhiko Kuroda earlier said that nations understand Japan’s stance, indicating that he expects no censure. The currency traded at 98.59 per dollar as of 3:04 p.m. in Tokyo, down 0.4 percent.
The G-20 will affirm a commitment to avoid competitive devaluation without singling out any nation, according to a draft statement seen by a Bloomberg BNA reporter. The yen has dropped about 20 percent against the dollar in the past six months, the biggest loser among 16 major currencies, on plans for unprecedented easing.
“Chances are high that the result of the G-20 meeting will deliver tailwinds for Japan and yen depreciation,” said Takahiro Sekido, a strategist in Tokyo at Bank of Tokyo- Mitsubishi UFJ Ltd., who formerly worked at the BOJ.
Aso said “no one” opposed Japan’s policies at the meeting, about two weeks after the BOJ unveiled a plan to ramp up bond buying and double the monetary base by the end of 2014.
In an interview in Washington, South Korean Finance Minister Hyun Oh Seok said the yen’s slide is a bigger risk for his nation’s economy than threats from North Korean leader Kim Jong Un. While Japan’s policies will aid a global recovery, the “spillover” effects merit discussion, Hyun said.
In a statement, Hyun said he told Christine Lagarde, the head of the International Monetary Fund, of South Korea’s concern that Japan’s policies are hurting the export competitiveness of other nations.
Japanese Prime Minister Shinzo Abe’s campaign to pull his nation out of 15 years of deflation has triggered a jump in stocks and the slide in the nation’s currency. While nations including China have expressed concern at spillovers from developed-nation easing, U.S. Treasury Secretary Jacob J. Lew and Bank of Canada Governor Mark Carney this week signaled support for Japan’s stimulus.
“We aren’t intending to weaken the currency at all,” Kuroda told reporters in Washington, where he’s attending his first G-20 gathering as central bank chief. The BOJ’s easing “is for a domestic policy goal to achieve the 2 percent inflation target at the earliest possible time,” he said.
Asked whether the meeting of finance chiefs and central bank governors will consider the risk of Japan fueling competitive devaluations, Kuroda said: “That probably won’t be discussed much.”
To contact the reporter on this story: Toru Fujioka in Tokyo at email@example.com