In the foreign exchange market, the yen continues to depreciate.

How do the government and the Bank of Japan perceive this depreciation of the yen?

We will explore the true meaning behind the recent subtle changes in the statements of the Minister of Finance and the Governor of the Bank of Japan.

(Akihiro Shiraishi, Reporter, Ministry of Economic Affairs)

In the dollar-yen exchange rate in the foreign exchange market, the depreciation of the yen accelerated from the beginning of March, and on April 28, the BOJ announced that it would maintain monetary easing measures, and the price dropped to the 131 yen level per dollar.



The yen's depreciation level for the first time in 20 years has been updated (as of 7:00 pm on April 28).



The yen depreciated by about 15 yen in about two months.



When financial markets are volatile, currency officials' remarks are of particular interest to investors.

This is because the market moves with just one statement.



We, the reporters in charge of finance, also carefully check what the officials say, but if you follow the changes in what you say, you may be able to see what you really mean.

Remarks with consideration for the finance minister

This year, March 22nd.

The yen exchange rate has dropped to the 120 yen level per dollar for the first time in about 6 years and 1 month.



The US Fed Chairman Jerome Powell suggested in a speech that the rate hike could be doubled, and the market was aware of the widening interest rate differential between Japan and the United States, and the movement to sell the yen became stronger.



This is the remark of Minister of Finance Suzuki on that day.

"The depreciation of the yen will improve the profits of exporting companies. On the other hand, the rise in import prices may increase the burden on companies and consumers, which has both positive and negative effects. Yes, we must continue to look at trends in the foreign exchange market and its impact on the Japanese economy. ”Can you say



that the answer was taken into consideration so as not to affect the market by talking about both the positive and negative aspects of the depreciation of the yen?

Kuroda's unshakable remarks depreciate the yen

Meanwhile, the Bank of Japan's Governor Kuroda spoke at a press conference after the monetary policy decision meeting on March 18 about his consistent attitude toward monetary policy.

"We will carry out monetary easing without hesitation if necessary."


"The basic composition is that the depreciation of the yen has a positive effect on both the economy and prices. It is a mistake that the depreciation of the yen is all negative for the economy.



" , Invited investors to buy yen and buy dollars, which they received as if the yen was tolerated in the market.



On April 13, the depreciation of the yen accelerated from the view that monetary easing will continue for the time being in the market, based on the statement by Governor Kuroda at the trust convention that "the current strong monetary easing will continue persistently."

On this day, the yen depreciated for the first time in 20 years with the dollar hitting the 126 yen level.



Kuroda's remarks have been consistent from beginning to end, but investors who are aware of interest rate differentials seem to be more likely to react sensitively to yen selling signs.

Mention the definition of a bad yen depreciation

On the other hand, it was the statement of Finance Minister Suzuki on April 15 that the market participants were prepared.

"The depreciation of the yen is progressing, and imports are soaring (...). In response, raw materials cannot be passed on to prices sufficiently, and even if you buy them, the environment has not grown to the point where wages greatly exceed the growth. I think it can be said that the depreciation of the yen is bad. ”



It was received in the market that Minister Suzuki defined the“ depreciation of the bad yen ”for the first time.



I also felt that it was a very in-depth remark.

Kuroda, some orbital correction?

I don't know if it was the statement of the Minister of Finance, but the Bank of Japan's Governor Kuroda, who had said that the depreciation of the yen is generally positive, also saw a rapid depreciation of the yen in the Diet response on the 18th, three days later. I will touch on the downsides of moving forward.

"The evaluation that the depreciation of the yen is positive for the Japanese economy as a whole is the result of various simulation analyzes. The basics have not changed. However, the recent rapid depreciation of the yen ... is a fairly rapid exchange rate fluctuation. There is a risk that it will be difficult to formulate a business plan for a company, and in that sense, we must consider the negatives.



" A market person said.

Shown with numbers

After that, Minister Suzuki met with US Treasury Secretary Janet Yellen at the G20 = Finance Ministers and Central Bank Governors' Meeting of 20 major countries held in Washington on April 21.



After the meeting, he told reporters, "I have shown numerically that the recent depreciation of the yen is still sharp."



Discussions between top monetary authorities are veiled.

It was surprisingly taken to profess that it showed concrete numbers.



A market person said, "It's a sign of the desire to stop the depreciation of the yen."

Be wary of high prices and impact on elections

Regarding the true meaning of Minister Suzuki's remarks, one government official said as follows.

Government official


"Amid rising raw material prices, price increases are beginning to spread, especially in foodstuffs. On the other hand, while the economic recovery from Corona is in progress and wages are not rising, if the yen depreciates too much, households will be burdened. There are voices within the administration that fears of high prices could affect the summer elections for the House of Representatives. "

To the last, support the economy

Meanwhile, the Bank of Japan decided to maintain large-scale monetary easing at its meeting on April 28.

In addition, we have launched a surprising measure of conducting a "continuous limit operation" every business day to buy unlimited 10-year government bonds at a yield of 0.25%.



Governor Kuroda said that the aim was "to firmly set the upper limit of long-term interest rates."



One market official said, "The normalization of the limit operation this time is a considerable step forward for the Bank of Japan. For Kuroda, the current monetary easing policy is not for the purpose of foreign exchange, but for supporting the economy. This economic situation. It's a sign of a firm belief that policy shouldn't change. "



The Bank of Japan emphasizes the continuation of monetary easing and the government, which is becoming more cautious about the various effects of high prices.



The subtle differences in remarks ooze the thoughts of each position.

Next week Japan is in the middle of a big holiday, but the focus of the market is the US FOMC / Federal Open Market Committee, which will be announced early on the 5th of Japan time.

Powell said at a meeting in Washington on April 21 that he intends to accelerate monetary tightening, including mentioning a 0.5% rate hike, which is double the usual rate.

Market interest is also growing due to changes in Powell's remarks on the rate hike stance.



After the holidays, the final settlement of accounts of major companies will be one after another.