Japan’s government must be ready to take whatever steps needed to support the plunging yen, the country’s deputy chief cabinet secretary Seiji Kihara said on Sunday, as its currency continues to struggle.
The yen has fallen to 24-year lows against the dollar, as investors focus on the widening divergence between the US Federal Reserve’s aggressive interest rate hikes and the Bank of Japan’s (BOJ) pledge to maintain ultra-low rates.
“As for excessive, one-sided currency moves, we will closely watch developments and must take steps as needed,” Kihara told a television programme, when asked about the yen’s recent falls.
“I won’t comment on monetary and interest-rate policy, as they fall under the jurisdiction of the BOJ,” Kihara added.
Kihara also said the government will consider “in the not so distant future” steps to further open Japan’s borders to overseas visitors, such as by scrapping a cap on the daily number of entrants.
“A weak yen is most effective in attracting inbound tourism,” Kihara said, adding that further steps must be taken to draw in more foreign tourists into the country.
Japan eased border controls from September 7 by raising the ceiling for daily entrants to 50,000 and freeing entry for travellers on package tours without the need for guides.
Analysts say scrapping the ceiling and allowing more travellers would be crucial to attract foreign money into Japan and revive its fragile economy.
On how to finance an expected increase in Japan’s defence spending, Kihara said he would not rule out issuing government debt.
“Our goal is to drastically strengthen Japan’s defence by tapping various sources of revenue. We’ll be flexible on the funding and won’t rule out any options,” he said.
In a policy roadmap released in June, the government said it wanted to drastically increase defence spending “within the next five years,” highlighting Tokyo’s interest in boosting defence at a time of tension with its powerful neighbour China.
- Reuters with additional editing by Sean O’Meara