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.
DISCONTENT: The CCP finds positive content about the lives of the Chinese living in Taiwan threatening, as such video could upset people in China, an expert said Chinese spouses of Taiwanese who make videos about their lives in Taiwan have been facing online threats from people in China, a source said yesterday. Some young Chinese spouses of Taiwanese make videos about their lives in Taiwan, often speaking favorably about their living conditions in the nation compared with those in China, the source said. However, the videos have caught the attention of Chinese officials, causing the spouses to come under attack by Beijing’s cyberarmy, they said. “People have been messing with the YouTube channels of these Chinese spouses and have been harassing their family members back in China,”
The Central Weather Administration (CWA) yesterday said there are four weather systems in the western Pacific, with one likely to strengthen into a tropical storm and pose a threat to Taiwan. The nascent tropical storm would be named Usagi and would be the fourth storm in the western Pacific at the moment, along with Typhoon Yinxing and tropical storms Toraji and Manyi, the CWA said. It would be the first time that four tropical cyclones exist simultaneously in November, it added. Records from the meteorology agency showed that three tropical cyclones existed concurrently in January in 1968, 1991 and 1992.
GEOPOLITICAL CONCERNS: Foreign companies such as Nissan, Volkswagen and Konica Minolta have pulled back their operations in China this year Foreign companies pulled more money from China last quarter, a sign that some investors are still pessimistic even as Beijing rolls out stimulus measures aimed at stabilizing growth. China’s direct investment liabilities in its balance of payments dropped US$8.1 billion in the third quarter, data released by the Chinese State Administration of Foreign Exchange showed on Friday. The gauge, which measures foreign direct investment (FDI) in China, was down almost US$13 billion for the first nine months of the year. Foreign investment into China has slumped in the past three years after hitting a record in 2021, a casualty of geopolitical tensions,
‘SOMETHING SPECIAL’: Donald Trump vowed to reward his supporters, while President William Lai said he was confident the Taiwan-US partnership would continue Donald Trump was elected the 47th president of the US early yesterday morning, an extraordinary comeback for a former president who was convicted of felony charges and survived two assassination attempts. With a win in Wisconsin, Trump cleared the 270 electoral votes needed to clinch the presidency. As of press time last night, The Associated Press had Trump on 277 electoral college votes to 224 for US Vice President Kamala Harris, the Democratic Party’s nominee, with Alaska, Arizona, Maine, Michigan and Nevada yet to finalize results. He had 71,289,216 votes nationwide, or 51 percent, while Harris had 66,360,324 (47.5 percent). “We’ve been through so
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