Finance Minister Hiroshi Mitsuzuka implied May 9 that he would like to see a further strengthening of the yen against the dollar, saying he was "not yet satisfied" with current foreign exchange levels.
Speaking at a morning news conference, Mitsuzuka acknowledged that in recent days the yen was appreciating against the greenback. "I believe this is due to the fact that the content of the recent Group of Seven joint statement (calling for exchange rates that would not lead to a return to large external imbalances) has begun to sink in for market players," he said.
But he added that he hopes to see the G-7 agreement have an even deeper effect on the mentality of participants in the foreign exchange market. The finance minister did not comment on whether authorities would consider market intervention to bring rates to levels they feel satisfactory, only repeating the G-7 statement that proper action would be taken when necessary.
The yen rose to the 123 level in Tokyo trading May 8 in response to comments by the Finance Ministry's Eisuke Sakakibara, director general of the International Finance Bureau, that the yen could strengthen to 103 to the dollar.
Trading partners such as the United States understand that under such circumstances, Tokyo does not intend to implement traditional economic policies and budget-forming methods, Mitsuzuka said, indicating that other nations would accept a reduction in public works spending as part of Japan's efforts to cut its fiscal deficit.