Economic revitalization minister Akira Amari denied Friday that Japan is engaging in currency manipulation to boost exports after the dollar topped ¥100 for the first time in four years.
Amari said signs of recovery in the U.S. economy were behind the dollar’s rise against the yen and that foreign exchange rates should be determined by the market.
While the yen’s steep slide, driven by high expectations for the Bank of Japan’s drastic monetary easing, has chafed other export-reliant nations, including South Korea, Amari said, “We don’t have any intention of manipulating the foreign exchange rate.”
He said the purpose of Prime Minister Shinzo Abe’s “Abenomics,” centering on aggressive quantitative easing by a suddenly compliant BOJ and the Liberal Democratic Party’s habitual fiscal spending binges, is “to end deflation,” which has plagued the economy for more than two decades.
Quantitative easing, however, may be in the spotlight at a two-day meeting of the Group of Seven finance chiefs in Britain starting Friday, some analysts said.
Finance Minister Taro Aso and BOJ chief Haruhiko Kuroda, who are scheduled to attend the gathering, could be forced to tell their G-7 counterparts that Japan’s policy is “intended for domestic purposes,” which refers neither to deflation nor exports, they said.
On Friday morning in Tokyo, the U.S. currency extended its gains, briefly topping ¥101.
Amari, meanwhile, pledged to take steps needed to avoid adverse effects from the yen’s depreciation on the economy. Data already suggest the weak yen is driving up import costs.