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TOKYO (Reuters) -Japan’s government will closely watch exchange-rate moves as market stability was “very important,” Finance Minister Shunichi Suzuki said on Tuesday in the wake of the yen’s decline to a five-year low against the dollar.
The weaker yen would boost exporters’ profits, but deal a blow to households and retailers by inflating the cost of importing food, fuel and other raw material goods.
“Exchange-rate stability is very important. We’ll carefully monitor the currency market and its impact on the Japanese economy,” Suzuki told a news conference, when asked about the softening yen.
He refrained from directly commenting on the dollar/yen’s level and whether a weak yen was negative for Japan’s economy.
The dollar hit a more than five-year high above 118 yen on bets that the Bank of Japan (BOJ), which announces its latest policy decision on Friday, would maintain its dovish stance despite rising inflationary pressures.
The BOJ will sustain its massive monetary stimulus as it will likely take time for inflation to hit its 2% target, Seichi Shimizu, the head of the central bank’s monetary affairs department, told parliament on Tuesday.
