Japan’s Finance Minister Shunichi Suzuki said on Tuesday that the government will continue to analyze the impact of the strengthening yen on the economy and respond appropriately. “Our stance has been that exchange rates should be determined by markets reflecting fundamentals, but rapid fluctuations are not desirable,” Suzuki said, speaking at a regular news conference following the cabinet meeting. The U.S. dollar fell to a more than one-year low against the yen, trading below the key 140 mark on Monday on speculation that the Federal Reserve could implement a 50-basis-point interest rate cut at its policy meeting this week. Suzuki said the stronger yen could affect the economy both positively and negatively through various channels, such as exporters’ overseas sales and import costs for households and businesses. He noted that the yen has been trading above an average of 145 per dollar that Japanese companies assume for the second half of the fiscal year, but their profits and financial conditions have been generally healthy. “In the meantime, we will continue to accurately analyze the impact of exchange rate fluctuations and price movements on the economy and people’s lives and respond appropriately,” he said.
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