TOKYO – Rintaro Tamaki, who served as Japan’s Vice-Minister of Finance for International Affairs from 2009 to 2011, reflected on past interventions in the currency market, particularly during the tumultuous period following the March 2011 earthquake and the Fukushima disaster. He highlighted these interventions aimed at stabilizing markets but also underscored the limitations of such measures in addressing fundamental economic issues.
Tamaki pointed out that the current weakness of the yen is partly due to the interest rate differentials between Japan and the United States, as well as Japan’s deteriorating fiscal health. He acknowledged that while interventions such as dollar-selling and yen-buying could have a psychological impact on markets, they are unlikely to rectify underlying structural problems or provide long-term support for the yen.
Despite this, Tamaki expressed that measures designed to slow down the yen’s decline could be seen as acceptable. His reflections come at a time when market participants are closely monitoring Japan’s currency policies and their effectiveness in the face of ongoing economic challenges.
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