Banknotes of Japanese yen are seen in this illustration picture taken June 15, 2022. REUTERS/Florence Lo/Illustration
TOKYO: Japan appointed a new top foreign exchange diplomat on Friday as the yen plumbed a 38-year low against the dollar, heightening expectations of imminent market intervention by Tokyo to shore up the battered currency.
Atsushi Mimura, a financial regulation veteran, replaces Masato Kanda, who launched the biggest yen-buying intervention on record this year.
The change is part of a regular personnel reshuffle conducted every year and comes as officials ramped up their warnings about intervention.
Finance minister Shunichi Suzuki said on Friday authorities were "deeply concerned" about the impact of "rapid and one-sided" foreign exchange moves on the economy.
The yen slid past 161 per dollar on Friday to its weakest since 1986.
Speaking at a regular press conference, Suzuki said authorities would respond appropriately to excessive currency moves and that confidence in the Japanese currency is maintained.
"The government is closely monitoring developments in the foreign exchange market with a high sense of urgency," Suzuki said, adding efforts to continue forging ahead with fiscal reform is crucial.
The yen fell to 161.155 per dollar on Friday morning, with neither an overnight drop in U.S. yields nor data showing solid consumer price gains in Tokyo arresting the slide.
Japanese authorities are facing renewed pressure to stem sharp declines in the yen as traders focus on the interest rate divergence between Japan and the United States.
Tokyo spent 9.8 trillion yen ($60.91 billion) intervening in the foreign exchange market at the end of April and early May, after the Japanese currency hit a then 34-year low of 160.245 per dollar on April 29.
NEW DIPLOMAT
Mimura's appointment as top FX diplomat will take effect on July 31 after the meeting of the Group of 20 finance ministers and central bank governors in Rio de Janeiro from July 25.
Little, however, is known about his stance on currency policy.
Currently head of the ministry's international bureau, the 57-year-old will become vice finance minister for international affairs - a post that oversees Japan's currency policy and coordinates economic policy with other countries.
Having spent nearly a third of his 35-year government career at Japan's banking regulator, Mimura has expertise and international ties in the area of financial regulation.
During his three-year stint at the Bank for International Settlements in Basel, Mimura worked with Mario Draghi to set up the Financial Stability Board in the midst of the 2008-2009 global financial crisis to reform financial regulation and supervision.
At the finance ministry, he worked on the revision to the law over the Japan Bank for International Cooperation last year to expand the scope of the state-owned bank and make foreign companies key to Japan's supply chains eligible for loans from the bank.
Mimura was also part of a government team that briefed foreign investors on the 2020 revisions to foreign ownership rules to dispel the notion that tighter rules were meant to discourage foreign investment in Japan.
Mimura takes over from Kanda who, during his three-year tenure, actively jawboned markets to combat sharp yen falls he described were driven by speculators.
Kanda oversaw a bout of yen-buying intervention in late April and early May, in which Japan spent $62 billion to prop up the sagging currency.
A weaker yen is a boon for Japanese exporters, but a headache for policymakers as it increases import costs, adds to inflationary pressures and squeezes households. - Reuters
