WASHINGTON (Kyodo) The yen is undervalued at its current level of around 120 to the dollar and does not reflect the nation’s economic fundamentals, Heizo Takenaka, architect of economic reforms for former Prime Minister Junichiro Koizumi, said Wednesday.

“I think, at this moment, my personal observation is the yen is undervalued in the market,” the former internal affairs and communications minister said during a question and answer session after a speech he gave in Tokyo.

Takenaka, now professor of economics at Tokyo’s Keio University, also said there is “strong pressure” potentially working to raise the currency’s value, citing growing yen-denominated foreign currency reserves held by foreign governments.

On the Bank of Japan’s monetary policy, he warned the central bank against raising interest rates now, saying its policy decisions could make or break the Japanese economy over the next five to six years.

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