21 June 2002, 09:15 Shiokawa - MoF to watch forex; excess govt involvement may cause intl friction
TOKYO (AFX-ASIA) - Finance Minister Masajuro Shiokawa said the ministry will
watch currency movements after the recent rise in the yen but warned excessive
government involvement in the market will cause international friction.
"We cannot control the forex market by ourselves. I think there is no other
way to react but (to) closely watch the market," Shiokawa told a regular
briefing.
Prime Minister Junichiro Koizumi will meet his counterparts from the other
G8 countries for a summit in Canada next week after Japan came under criticism
from US manufacturers for market intervention to prop up the dollar.
"If any country tries to take action to improve its currency position,
relative to other nations, it will cause international friction and hurt the
rules of the free economy," Shiokawa said.
"It is undesirable for the government to be constantly involved in market
activities. But if our currency faces wild fluctuations -- with (speculative)
intent -- we need to pay attention from the political perspective," he said.
"The problem is how to judge market fluctuations. Forex levels naturally
move up and down. If we respond to this with fear or celebration, it would
jeopardise the economy," he said.
Shiokawa was responding to a question on recent remarks by members of the
ruling Liberal Democratic Party that Japan should stress more strongly at G7 and
G8 meetings its concerns over the appreciation of the yen.
Japanese equities will recover from recent sharp falls, he added.
"... Stock price(s) will rebound in the future because of the strong tone of
the economy. The sharp fall in the market is not limited to Japan. Global market
prices are declining," he said.
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