November 29, 2021

Japan said that exchange rate stability is very important because the weak yen may lead to cooling consumption

Japan’s Deputy Chief Cabinet Secretary Hitohiko Isozaki issued a warning on Wednesday after the yen fell to a four-year low against the dollar. He said the government will pay close attention to currency market movements, as exchange rate stability is important.

The dollar rose to as high as 114.585 yen against the yen, the first time since November 2017, reflecting the rise in long-term interest rates in the United States.

“Exchange rate stability is extremely important, so we will pay close attention to the currency market,” Isozaki said when asked about the yen’s fall at a press conference.

But he declined to comment on the specific exchange rate level.

Japanese policymakers generally favor the weak yen because it gives the country a competitive advantage overseas for exports.

However, the recent fall in the yen, coupled with rising energy and raw material costs, has exacerbated concerns about rising household living costs and retailers still being affected by the epidemic. 

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