Japan top government spokesman Suga signals readiness to stem yen gains
![Japan top government spokesman Suga signals readiness to stem yen gains Japan top government spokesman Suga signals readiness to stem yen gains](/files/en/news/2016/8/30/1777_697.jpg)
EghtesadOnline: Japanese Chief Cabinet Secretary Yoshihide Suga said on Tuesday the government is watching market moves carefully and is ready to respond "appropriately", when asked whether Tokyo could intervene in the currency market to stem excessive yen rises.
Suga, the government's top spokesman, also defended the Bank of Japan's controversial negative interest rate policy, saying that such steps would benefit financial institutions if they help improve the economy.
"The Ministry of Finance, the Financial Services Agency and the BOJ now hold regular meetings on markets," Suga told Reuters in an interview.
"Through the meetings, the government will closely watch market moves and respond appropriately," he said when asked whether Japanese authorities could intervene in the currency market if the yen spikes abruptly.
Japan's economy ground to a halt in April-June and analysts expect any rebound in the current quarter to be modest, as weak global growth and the yen's 20 percent rise against the dollar this year have hurt exports and capital spending.
The BOJ's decision in January to adopt negative interest rates has failed to arrest unwelcome yen gains and instead drew market criticism for hurting financial institutions' profits.
Suga said the BOJ's policies will give financial institutions "huge" benefits if they successfully boost the economy, adding that it was up to the central bank to decide on specific monetary policy steps.
Asked whether Japan could resort to "helicopter money", or direct central bank underwriting of government debt, Suga said there was no clear definition of what helicopter really meant.
He added that it was important for the government and the BOJ to work closely together to beat deflation, while respecting the central bank's independence from political interference.
"The BOJ decided to expand purchases of exchange-traded funds (last month). Shortly after that, the government announced its economic stimulus package," Suga said.
"I'm confident that we will see results if the government and the BOJ coordinate policies."