At a press conference on the 12th, Chief Cabinet Secretary Kihara Minoru (木原稔) expressed the general view that “the yen's undervaluation is a problem” after the yen temporarily weakened to the upper ¥159 range. The government reiterated its commitment to maintaining close coordination with the U.S. Treasury and working to maintain orderly markets.
As the yen weakened, Chief Cabinet Secretary Kihara Minoru (木原稔) made remarks describing the yen's undervaluation as a problem, heightening market caution. The remarks at the press conference were taken as indicating the government's view of the market and its policy direction going forward.
The yen selling behind the depreciation reflects the interest-rate differential between Japan and the United States, raising concerns about higher import prices and the impact on households and companies. While viewing sharp fluctuations as a problem, the government emphasized its stance of seeking market stability through policy coordination with the United States.
The remarks, informed by the understanding shared by the leaders of the two countries, come at a juncture where their effectiveness may be tested. They were made against the backdrop of expectations that the yen's weakening trend will continue unless there is a major change in the overall direction of monetary policy in Japan and the United States. Market participants are also watching the risk of intervention by the government and the Bank of Japan.