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JAPAN is getting a new currency czar just as the yen trades near its weakest levels in almost four decades, the nation’s finance minister said.
The Finance Ministry appointed Atsushi Mimura as its new vice finance minister for international affairs, making him the face of official efforts to manage the yen as Masato Kanda steps down, Shunichi Suzuki told reporters at a press conference on Friday (Jun 28).
The move, which takes effect Jul 31, is part of a normal personnel rotation and will not affect the country’s broad currency policies. Mimura, who is currently director general of MOF’s international bureau, will almost certainly follow the same script as his predecessor in advocating for a stable currency that reflects economic fundamentals.
Still, the role involves delicate communications with media personnel. Kanda emerged as a highly charismatic policy spokesperson after assuming the position in 2021. During his tenure, Kanda navigated the pandemic, historic yen weakness, the outbreak of Russia’s full-scale invasion of Ukraine and Japan’s hosting of the Group of Seven finance meeting last year.
Most recently Kanda oversaw a monthly record of 9.8 trillion yen (S$82.7 billion) in intervention to support the yen between late April and early May after the currency weakened past 160 to the US dollar. The yen renewed a 38-year low earlier this week, touching 160.87 to the US dollar. Friday morning in Tokyo, Japan’s currency was trading around 160.65.
Weakness of the currency has spurred cost-push inflationary pressure through imports, generating widespread concern among business executives, officials and consumers. Japanese authorities stepped into the market at least twice since late April to support the yen with a record amount of intervention.
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In his new role, Mimura will tackle multiple financial challenges, from ongoing global conflicts to debt and economic security. Earlier in his career, he held positions at the Financial Services Agency, the Bank for International Settlements, as well as the Administration and Legal Department, where he helped liaise with the parliament.
Mimura’s challenges include “the excessively weak yen, and two ongoing wars in Ukraine and the Middle East”, according to Tatsuo Yamasaki, a former vice finance minister who now teaches at the International University of Health and Welfare. “The global economy is also facing a turning point in terms of monetary policy in Europe and the US. Under these circumstances, the vice finance minister will be involved in discussions on how to stabilise the global economy.”
Yamasaki said there will be policy continuity. In making statements about the economy or currencies, officials “are doing it as an organisation under the guidance of the finance minister”, Yamasaki said. “The personnel changes won’t change this. People with the ability and experience to do it properly and with continuity are appointed to the position.”
Hideki Ito will replace Teruhisa Kurita as commissioner of Japan’s Financial Services Agency, Suzuki said.
Kanda will remain in his position until the end of July so he can represent Japan at a gathering next month in Brazil of the Group of 20 finance authorities.
At Friday’s press conference, Suzuki offered a demonstration of the task at hand for Mimura, reiterating several standing policies on currencies. The minister conveyed discomfort with one-side currency moves and called for stable moves that reflect economic fundamentals as he watches the market “with a high sense of urgency”. BLOOMBERG
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