2023-07-09 14:36:27
Uchida interview “YCC continues for the time being”
‘Mr. N’ Sakakibara Former Vice Minister
“It may fall below 160 yen per dollar next year”
The Bank of Japan (BOJ) dismissed the possibility of changing the short- and long-term interest rate manipulation (YCC) policy and reiterated its position that it would maintain the existing hyper-accommodative monetary policy for the time being. Former Vice Minister of Finance Eisuke Sakakibara, who was nicknamed “Mr. Yen” for his skillful exchange rate management during his tenure, predicted that the value of the yen might fall to 160 yen per dollar at this rate.
According to the Nihon Keizai Shimbun (Nikkei) on the 7th, Bank of Japan Vice Governor Shinichi Uchida conducted an interview with Japanese media for the first time since taking office in March. When asked regarding the possibility of YCC revision, he said, “I want to make a balanced decision from the perspective of how to do financial easing while considering market functions.” “The risk of missing the opportunity to meet the 2% inflation target by shifting policy hastily is greater than the risk of continuing to rise above 2% by implementing austerity belatedly,” he said. “There will be no change to the target.”
However, he did not deny that there is a possibility of reexamination in the future, saying, “I am strongly aware that the YCC policy is influencing the functioning of the market.” “A rapid and unilateral yen increase raises uncertainty and is undesirable. We will continue to monitor market trends and their impact on the economy in liaison with the government,” he added.
Bank of Japan Vice Governor Shinichi Uchida [사진 = 도쿄 교도 연합뉴스]
Vice-President Uchida gave a positive evaluation, noting that Japan’s current inflation rate is moving beyond the 2 percent target set by the authorities, saying, “Finally, there are signs of a change in wage and price setting by companies.”
Deputy Governor Uchida, a former Bank of Japan graduate with long experience in planning financial policy, was the person responsible for designing the two-dimensional monetary easing policy promoted by former Governor Haruhiko Kuroda following taking office in 2013.
Meanwhile, former Vice Minister of Finance Eisuke Sakakibara, who was called ‘Mr. Yen’ in the 1990s, warned that the difference in monetary policy between the US and Japan might cause the yen to fall below 160 yen per dollar, reaching a new low in 32 years. He told Bloomberg on the 6th (local time), “(The value of the yen) may fall by more than 10% from the current market price, so next year the 160 yen may collapse. There is a possibility that the Japanese authorities will intervene at around 160 yen.” .
Former Finance Minister Sakakibara predicted last year that the value of the yen would fall to the 150 yen range. He analyzed that the yen will continue to plummet until the Bank of Japan shifts to tightening.
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