Japanese Finance Minister Yoshihiko Noda said on Friday his ministry is communicating with other Group of Seven nations on currencies amid concern the strong yen will further dent the country's slowing economy.
Japanese policymakers have tried to talk down the yen as it stays within sight of a 15-year high against the dollar, clouding the outlook for the export-reliant economy. JPY=
Following are recent key quotes by the BOJ and government officials, as well as business leaders.
FINANCE MINISTER YOSHIHIKO NODA, Aug. 20
(When asked whether finance ministry officials were talking with their G7 counterparts about currencies)
I can't comment on what is being discussed, but we are communicating with each other ... I won't comment on currency intervention.
NODA, Aug. 19
We will continue to watch foreign exchange moves carefully.
DEPUTY FINANCE MINISTER NAOKI MINEZAKI, Aug. 19, to reporters
Given Japan's deflation or falling price levels, the yen tends to appreciate if left unattended. The question is how the BOJ and the government will judge this situation. There is no doubt the yen's rise has a very severe effect on exporting companies ...
I'm not an advocate of inflation targeting policy ... I have great doubts about whether monetary easing would help Japan escape a liquidity trap. I don't mean to defend the BOJ and I think the BOJ should make efforts to strengthen the economy by employing various measures. But as Japan is mired in a liquidity trap, I don't think increasing liquidity further would help the country escape the current situation.
ECONOMICS MINISTER SATOSHI ARAI, Aug. 16, to reporters
We are discussing quite a lot with the Bank Japan what to do about the yen's rise, and I hear the finance ministry is also exchanging various opinions with the BOJ at the working level. Our stance is to closely watch these developments.
PRIME MINISTER NAOTO KAN, Aug. 14, quoted by Japanese media
The sudden strengthening of the yen has become a bit of a concern. I want to continue watching it carefully in the future ... I want to be sure to communicate as necessary (with the Bank of Japan).
NODA, Aug. 12, to reporters
The government's basic stance is that excessive and disorderly moves in foreign exchange rates would have a negative impact on the stability of the economy and financial markets. We must watch them with the utmost attention. In particular I'm watching currency moves very carefully and with great interest.
I'm closely in touch with the prime minister and the chief cabinet secretary with regard to market moves. We will respond appropriately while carefully examining economic trends ... I'll refrain from commenting on intervention.
Officials (in the finance ministry) are sharing information with officials not only in the United States but other countries at the working level ... I'm not thinking about (a teleconference with other G7 members) at the moment.
BOJ GOVERNOR MASAAKI SHIRAKAWA, Aug. 12, in a statement
Currency and stock markets are showing big fluctuations against the backdrop of heightened uncertainty about the U.S. economic outlook.
The BOJ will closely watch market fluctuations and their impact on the Japanese economy.
BANK OF JAPAN EXECUTIVE DIRECTOR HIROSHI NAKASO, in charge of international affairs, Aug. 12, to reporters
Rate checks are part of our intention to closely watch currency market moves.
VICE BANKING MINISTER KOHEI OTSUKA, Aug. 11, interview
Currency (rates) seem to have come to something of a critical juncture. A rapid yen rise would boost deflationary factors, so the government and BOJ must act as one in considering what to do given our commitment to act against deflation ...
The BOJ said it would not tolerate negative inflation, and that means it has virtually set inflation targeting ... While it has not achieved positive inflation, it would be meaningless to aim for a 2-3 percent inflation.
SHIRAKAWA, Aug. 10, news conference after rate review
I acknowledge that yen rises pose a downside risk to business sentiment. We need to examine the impact on the overall economy in a balanced way.
We spent much time debating how the recent yen rise could affect business sentiment and the Japanese economy. This is an important point for us to examine ... No central bank in developed nations targets forex levels in managing monetary policy.
JAPAN ASSN OF CORPORATE EXECUTIVES CHAIRMAN MASAMITSU SAKURAI, Aug. 6, interview
Companies on average are assuming 90 yen a dollar. The dollar below 90 yen leads to considerably lower profits than their forecasts. But market intervention is internationally frowned on. It's not something an advanced nation should do to buttress the economy.