Japan’s new top currency diplomat, Atsushi Mimura, has stated that the country will maintain its basic approach on the yen, with intervention as an option to address excessively volatile movements in the exchange rate. Mimura emphasized the importance of abiding by internationally agreed commitments that exchange rates should be determined by markets, while also acknowledging that interventions may be necessary to prevent excessive volatility or disorderly movements that could impact economic and financial stability.
Mimura, who recently assumed the role of vice finance minister for international affairs, underscored the continuity of Japan’s currency policy and economic coordination with other countries. While recognizing the benefits of a weak yen for boosting exports, he also expressed concerns about the negative implications of a depreciated currency on imports and consumption. Mimura’s predecessor, Masato Kanda, conducted large-scale interventions in the yen during his tenure and actively communicated warnings to the markets against devaluing the currency.
In terms of communicating with the markets, Mimura hinted at a potential shift in style. While acknowledging the importance of market communication, he suggested that silence could also be a form of communication to avoid unnecessary speculation or uncertainties. He stressed the need for alignment between the Ministry of Finance, the Bank of Japan, and the Financial Services Agency on macroeconomic policies.
Mimura highlighted the importance of enhancing Japan’s economic competitiveness and promoting growth potential to address the depreciation of the yen’s effective exchange rates caused by decades of deflation. He emphasized the need to explore growth opportunities beyond traditional manufacturing sectors, such as inbound tourism, pop culture, and soft culture industries. With a strong background in financial regulation and international experience, Mimura is well-equipped to navigate the complexities of currency policy and economic coordination.
As Japan’s new top currency diplomat, Atsushi Mimura’s insights and expertise will play a crucial role in shaping the country’s approach to managing the yen and addressing economic challenges. With a focus on policy continuity, effective communication strategies, and enhancing economic competitiveness, Mimura aims to steer Japan towards sustainable growth and stability in the global economy.