Japan's finance minister said yesterday that authorities are closely monitoring the yen's rise against the US dollar but offered no clear sign of currency-market intervention to weaken the yen.
Meanwhile, a board member of the Bank of Japan said the central bank must carefully watch how problems in the US housing market might affect Japan's economy, suggesting that he doesn't see an imminent need to raise interest rates.
Worries about weakness in the US economy -- Japan's biggest export market -- and recent volatility in global financial markets have driven the US dollar to a two-and-a-half-year low, touching ?108.25 overnight. A strong yen hurts Japan's exporters by eroding their foreign-earned income.
Asked about the dollar's drop, Finance Minister Fukushiro Nukaga told Dow Jones Newswires that "we will closely watch that issue."
Nukaga expressed caution about the outlook for Japan's economy, repeated that the government must closely monitor how the so-called subprime mortgage crisis affects consumer spending in the US.
Separately, Bank of Japan (BOJ) board member Seiji Nakamura said that Japan's economy may suffer if problems in the US housing and banking sectors become more severe or fluctuations in financial markets increase.
"The global economy may deteriorate if the US economy sharply worsens," he said. "There is also the possibility that the Japanese economy may be negatively influenced."
The BOJ last raised interest rates to 0.5 percent in February. Many market players now believe the BOJ won't raise rates before the fiscal year ends in March.
Nakamura stressed that leaving monetary policy too easy for too long carries its own risks.
"Real interest rates remain at very low levels. If the expectation takes hold that interest rates will remain low for a long time, it will produce distortion in price formation in the market and allocation of resources. We have to cautiously watch the risk," he said.
But he offered few hints to the timing of the next rate hike.
Meanwhile, the head of China's central bank says Beijing wants a strong US dollar, a government news agency said yesterday.
Zhou Xiaochuan (周小川), governor of the People's Bank of China, made the comment to US Treasury Secretary Henry Paulson at a conference in South Africa, the Xinhua news agency said.
"Zhou said he told Paulson China hopes to see a strong dollar," Xinhua reported.
It said Zhou was responding to Paulson's prediction of a long-term recovery of the weakening dollar, which fell to another record low against the euro yesterday.
Zhou's comments put "weight behind the slumping currency," Xinhua said.
The US dollar has been falling against the euro, yen and other major currencies amid fears for the health of the US economy, stoked by the subprime mortgage crisis. Concerns about the US' huge trade deficit, which leaves more dollars in the hands of foreigners, is also weighing on the currency.
China keeps a large share of its US$1.43 trillion in reserves in US dollar-denominated assets such as US Treasuries, which means a falling dollar erodes the value of its holdings. Financial markets are watching to see whether Beijing shifts to a stronger currency such as the euro.
Zhou said that only when the dollar "devalues drastically can it be called weak, the scenario of which is likely to bring uncertainty to the world economy, to the reluctance of all parties concerned," Xinhua reported.
Zhou and Paulson were attending a meeting of the G20 -- the world's 20 biggest economies.
AIR SUPPORT: The Ministry of National Defense thanked the US for the delivery, adding that it was an indicator of the White House’s commitment to the Taiwan Relations Act Deputy Minister of National Defense Po Horng-huei (柏鴻輝) and Representative to the US Alexander Yui on Friday attended a delivery ceremony for the first of Taiwan’s long-awaited 66 F-16C/D Block 70 jets at a Lockheed Martin Corp factory in Greenville, South Carolina. “We are so proud to be the global home of the F-16 and to support Taiwan’s air defense capabilities,” US Representative William Timmons wrote on X, alongside a photograph of Taiwanese and US officials at the event. The F-16C/D Block 70 jets Taiwan ordered have the same capabilities as aircraft that had been upgraded to F-16Vs. The batch of Lockheed Martin
GRIDLOCK: The National Fire Agency’s Special Search and Rescue team is on standby to travel to the countries to help out with the rescue effort A powerful earthquake rocked Myanmar and neighboring Thailand yesterday, killing at least three people in Bangkok and burying dozens when a high-rise building under construction collapsed. Footage shared on social media from Myanmar’s second-largest city showed widespread destruction, raising fears that many were trapped under the rubble or killed. The magnitude 7.7 earthquake, with an epicenter near Mandalay in Myanmar, struck at midday and was followed by a strong magnitude 6.4 aftershock. The extent of death, injury and destruction — especially in Myanmar, which is embroiled in a civil war and where information is tightly controlled at the best of times —
Taiwan was ranked the fourth-safest country in the world with a score of 82.9, trailing only Andorra, the United Arab Emirates and Qatar in Numbeo’s Safety Index by Country report. Taiwan’s score improved by 0.1 points compared with last year’s mid-year report, which had Taiwan fourth with a score of 82.8. However, both scores were lower than in last year’s first review, when Taiwan scored 83.3, and are a long way from when Taiwan was named the second-safest country in the world in 2021, scoring 84.8. Taiwan ranked higher than Singapore in ninth with a score of 77.4 and Japan in 10th with
China's military today said it began joint army, navy and rocket force exercises around Taiwan to "serve as a stern warning and powerful deterrent against Taiwanese independence," calling President William Lai (賴清德) a "parasite." The exercises come after Lai called Beijing a "foreign hostile force" last month. More than 10 Chinese military ships approached close to Taiwan's 24 nautical mile (44.4km) contiguous zone this morning and Taiwan sent its own warships to respond, two senior Taiwanese officials said. Taiwan has not yet detected any live fire by the Chinese military so far, one of the officials said. The drills took place after US Secretary
RSS