Japan and the US can coordinate foreign exchange policy

The meeting took place in the context of a widening gap in the two countries’ monetary policies, when the US implemented a tight monetary policy while the US’s monetary policy Japan are in the superfluid category. This makes the value of Japan’s Yen at a record low in the past 20 years, potentially hindering the recovery of the Japanese economy.

As expected, after the G20 Finance Ministers Meeting in the US next week, Japanese Finance Minister Shunichi Suzuki plans to hold talks with his US counterpart Janet Yellen to discuss the possibility of major coordination. books on the foreign exchange market. The outcome of the meeting is expected to affect the future of the Japanese economy.

A man walks past the Bank of Japan (BOJ) headquarters in Tokyo. (Photo: Reuters)

Currently, the contrasting financial policies of the US and Japan are increasingly expanding, the US Federal Reserve (FED) continues to raise interest rates to deal with inflation, while the Bank of Japan (BOJ) still maintains the loose monetary policy. This difference caused the Yen to continue to plunge in the trading session on April 15, the Yen exchange rate against the USD was around 126.44 – 126.55 Yen/USD, the lowest level in the past 20 years. .

“Currently the yen is depreciating rapidly, which is causing difficulties, the government is cautious and will take appropriate actions in the future,” said Suzuki Shunichi, Japan’s finance minister.

The yen depreciating too quickly can have a negative impact on the Japanese economy, as it increases the cost of importing raw materials, pushing up production costs and the price of Japanese goods. The Bank of Japan may intervene in the currency market to stop the yen’s rapid decline. The last time the Bank of Japan intervened was in 2011.

According to forecasts, the Bank of Japan may intervene in the currency market to stabilize the yen if the yen-dollar exchange rate exceeds 130 yen. However, experts say that if it is to be effective, Japan’s intervention policy needs to be coordinated in the financial policies of the G7 and G20 countries, especially the US.

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