Finance Minister Taro Aso on Friday voiced concern about the adverse effects of interest rate hikes by the U.S. Federal Reserve, including a potential outflow of capital from emerging economies.
"Money moves to a country where interest rates are high from a country where interest rates are low," Aso said at a news conference after finance chiefs from the Association of Southeast Asian Nations met with their counterparts from Japan, China and South Korea.
"We are closely watching" when the Fed will carry out another rate hike, Aso said, adding that "each country should take each step to protect its own currency."
The U.S. central bank raised interest rates in December and then again in March, noting that its policymakers project two more rate hikes this year. This sparked fears that capital might leave emerging nations and cause their currencies to depreciate.
Philippine Finance Secretary Carlos Dominguez, who co-chaired the meeting in Yokohama with Aso, said at the same news conference that the members of ASEAN can deal with the negative impact of Fed rate hikes.
"Since the Asian crisis 20 years ago, we have learned a lot of lessons," Dominguez said. "Of course, I believe that we are better prepared than at any other time for external events such as the federal interest rate increases."
The 10 members of ASEAN are Thailand, Myanmar, Cambodia, Laos, Vietnam, Malaysia, Singapore, Indonesia, Brunei and the Philippines.