Japan's currency market interventions were a "necessary step," an anonymous senior Finance Ministry official said in response to a U.S. government report urging Tokyo to refrain from conducting further unilateral interventions.
"The yen's appreciation (against the dollar) since summer caused downside risks to the (Japanese) economy and we believe the interventions were a necessary step," the official told reporters Wednesday on condition of anonymity. The official also said that Japan will continue to explain its position to authorities in the United States and other countries.
The ministry and the Bank of Japan stepped into the foreign-exchange market in August and October to stem the yen's rise to record levels against the dollar and other major currencies. The yen's yearlong surge has negatively impacted exporters and the economy by paring the overseas profits of Japanese firms when repatriated.
On Tuesday, the U.S. Treasury Department released a semiannual report saying that "rather than reacting to domestic 'strong yen' concerns by intervening to try to influence the exchange rate, Japan should take fundamental and thoroughgoing steps to increase the dynamism of the domestic economy, increase the competitiveness of Japanese firms . . . and raise potential growth."