It must take action if necessary while monitoring the impact of currency movements

Japan’s new finance minister, Katsunobu Kato, said on Monday that the government “must take action if necessary while monitoring the impact of currency movements on economic and household activities.”

Other comments

The weak yen has both merits and demerits.

It will need to monitor how excessive currency movements will affect corporate activities and households.

He will leave specific policy steps to the Bank of Japan (BoJ) when asked if the policy rate should be kept at 0.25%.

I hope the BoJ will communicate thoroughly with the markets and adopt appropriate policies to achieve the 2% inflation target in a stable and sustainable manner.

Market reaction

USD/JPY holds the rebound near 148.50 following these comments above, still down 0.14% on the day.