TOKYO (Reuters) – Japanese Finance Minister Shunichi Suzuki expressed concern on Tuesday about the negative implications of the current weak yen and its effect on incentives to raise wages.
“One of our main objectives is to achieve wage increases that exceed the rise in prices,” Suzuki said. “On the other hand, if prices remain high, it will be difficult to achieve this objective even if wages rise.”
While a weak yen is a boon for exporters, it has become a headache for Japan’s monetary policy makers as it hurts consumption by raising the cost of raw material imports.
The yen’s fall above 160 per dollar late last month triggered an alleged round of interventions by Tokyo.
The Japanese currency has rebounded since then and was last trading around 156.45 units per dollar.
In a press conference after the cabinet meeting, Suzuki reiterated that exchange rates should be set by markets reflecting fundamentals and that it is desirable for the currency to move stably.
The government will closely monitor the foreign exchange market and take appropriate measures if necessary, he said.
Responding to questions about Japanese government bond yields, which hit their highest level in more than a decade on Monday, Suzuki said it is important for the government to closely monitor the market and communicate with traders.
The 10-year JGB yield was trading around 0.979% in the morning.
“The government will implement appropriate debt management policies to ensure the stability of public debt issuance,” Suzuki said.
(Reporting by Satoshi Sugiyama and Makiko Yamazaki; Edited in Spanish by Ricardo Figueroa)
