‘Rapid’ rise of yen a cause for worry, says Japan finance minister
Japan’s Finance Minister Taro Aso expressed worries about the yen’s continual rise, calling it “rapid” and hinting at the strong currency’s impact on exports as Japan struggles through a recession.
The yen’s rise came after Japan’s economy is bottoming out from its steepest decline, with the government considering restarting the economy while preventing a second wave of coronavirus infections.
The yen steadied at 107 against the dollar under Prime Minister Shinzo Abe’s leadership.
The dollar fell to a 4 ½-month low of 104.52 per yen on Friday as investors feared that the rising COVID-19 cases in the United States could stall its economic recovery.
A government panel said that Japan’s economy peaked in October 2018 and then fell into recession. This suggested that the world’s third-largest economy was struggling even before the coronavirus outbreak.
Added exports account for no more than 20% of Japan’s economy, suggesting that the yen’s rise won’t have a sudden impact on its economy. However, Aso’s warning emphasized the government’s efforts to boost external demand.