Japan Defends Currency Manipulation
The head of the Bank of Japan offered a poor defense as pressure mounts on the country over the reckless manipulation of the Japanese Yen, the claims it is manipulating the yen are beyond question, Abe the new Prime Minister was elected on his promise to manipulate the currency.
The comments from Masaaki Shirakawa were the latest in a string of weak denials from Japanese officials who have been fending off the global realization that they have orchestrated the currency’s recent steep slide.
The issue was expected to top the agenda at a G20 meeting in Moscow that starts Friday amid talk of a “currency war” in which rival nations drive down their currencies to protect their exporters.
“Our purpose is not to guide exchange rates, but to overcome deflation in the near-term and bring about sustainable growth with price stability,” Shirakawa told a news briefing in Tokyo. Of course they way for Japan to solve this issue is to have a weaker currency, and that is what Japan is doing regardless of international condemnation.
This month Shirakawa announced said he would step down from his post three weeks early, having been unable to see eye-to-eye with new Prime Minister Shinzo Abe, who put intense pressure on the bank to fall into line with the government’s policies, the BoJ is aware of the dangers Abe will unleash by his direct manipulation of the currency.
The BoJ held off any new policy measures at the end of a two-day policy meeting Thursday, after unveiling last month an indefinite easing program and an ambitious two-percent inflation target, which helped weaken the yen.
Tokyo has been on the defensive over its rogue monetary policy.
The yen has lost about 17 percent against the dollar and about 25 percent to the euro since November, when Abe and his Liberal Democratic Party campaigned in national elections on a platform of big spending and aggressive monetary easing.
Abe’s party swept to power in December.
Easing tends to push down the yen, and critics have suggested Tokyo and the central bank’s policies were behind its steep decline.
On Thursday, Shirakawa said he would be pushing a message at the G20 talks that Japan was only trying to boost its limp economy, the world’s third-largest, with the yen’s fall an unintended consequence.
On Tuesday, the Group of Seven richest nations issued a statement warning over volatility in forex markets, comments widely seen as a swipe at Tokyo.
G7 Members — Britain, France, Germany, Italy, Japan, the United States and Canada — would keep fiscal and monetary policy limited to meeting “our respective domestic objectives” and “not target exchange rates”, it said.
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