Japanese Prime Minister Yukio Hatoyama yesterday made a rare call for “firm steps” to be taken to stem the strength of the yen as the currency’s recent advances have hit exporters’ earnings.
Hatoyama told a parliamentary session that the yen’s current high value gives a misleading impression of the world’s second-largest economy, saying: “Japan’s economy and industries are not necessarily strong.”
“I think we need to take firm steps against such a strong yen,” he said, adding that there is a need for “political cooperation on the world stage.”
Hatoyama’s comments appear to mark a change from his position in January when he said that in principal the government should not discuss foreign exchange, which at the time contradicted calls by Finance Minister Naoto Kan for possible intervention. The yen surged to a 14-year high against the greenback in November, hitting ¥86.28 to the US dollar at one point. A strong yen hurts the competitiveness of Japanese exporters and erodes their overseas earnings when they are repatriated.
Since the start of the year the yen has traded around the ¥90 level against the dollar and about ¥130 to the euro.
Japan has not intervened in foreign exchange markets since March 2004, preferring instead to allow the yen to find its own level. The finance ministry can intervene by ordering the Bank of Japan (BOJ) to carry out monetary operations.
Hatoyama’s remarks came as the government is pressuring the BOJ to take stronger action to boost the economy and tackle a deflationary trend similar to the one that plagued Japan after the burst of an economic bubble in the early 1990s.
BOJ Governor Masaaki Shirakawa told lawmakers yesterday that the bank was “trying to stimulate demand by keeping interest rates low,” Dow Jones Newswire said.
His comment came amid speculation the bank will take fresh steps to ease credit at a two-day monetary policy meeting on Tuesday.
The Nikkei business daily reported yesterday that the bank aims to double cash injections into the market to ¥20 trillion (US$220 billion) and extend a loan facility program launched in December.
Last week the paper reported that the BOJ was considering a ¥10 trillion injection. By flooding financial markets with cash, the bank plans to keep short-term lending rates low in a bid to attract new borrowers.
A Chinese freighter that allegedly snapped an undersea cable linking Taiwan proper to Penghu County is suspected of being owned by a Chinese state-run company and had docked at the ports of Kaohsiung and Keelung for three months using different names. On Tuesday last week, the Togo-flagged freighter Hong Tai 58 (宏泰58號) and its Chinese crew were detained after the Taipei-Penghu No. 3 submarine cable was severed. When the Coast Guard Administration (CGA) first attempted to detain the ship on grounds of possible sabotage, its crew said the ship’s name was Hong Tai 168, although the Automatic Identification System (AIS)
An Akizuki-class destroyer last month made the first-ever solo transit of a Japan Maritime Self-Defense Force ship through the Taiwan Strait, Japanese government officials with knowledge of the matter said yesterday. The JS Akizuki carried out a north-to-south transit through the Taiwan Strait on Feb. 5 as it sailed to the South China Sea to participate in a joint exercise with US, Australian and Philippine forces that day. The Japanese destroyer JS Sazanami in September last year made the Japan Maritime Self-Defense Force’s first-ever transit through the Taiwan Strait, but it was joined by vessels from New Zealand and Australia,
CHANGE OF MIND: The Chinese crew at first showed a willingness to cooperate, but later regretted that when the ship arrived at the port and refused to enter Togolese Republic-registered Chinese freighter Hong Tai (宏泰號) and its crew have been detained on suspicion of deliberately damaging a submarine cable connecting Taiwan proper and Penghu County, the Coast Guard Administration said in a statement yesterday. The case would be subject to a “national security-level investigation” by the Tainan District Prosecutors’ Office, it added. The administration said that it had been monitoring the ship since 7:10pm on Saturday when it appeared to be loitering in waters about 6 nautical miles (11km) northwest of Tainan’s Chiang Chun Fishing Port, adding that the ship’s location was about 0.5 nautical miles north of the No.
SECURITY: The purpose for giving Hong Kong and Macau residents more lenient paths to permanent residency no longer applies due to China’s policies, a source said The government is considering removing an optional path to citizenship for residents from Hong Kong and Macau, and lengthening the terms for permanent residence eligibility, a source said yesterday. In a bid to prevent the Chinese Communist Party (CCP) from infiltrating Taiwan through immigration from Hong Kong and Macau, the government could amend immigration laws for residents of the territories who currently receive preferential treatment, an official familiar with the matter speaking on condition of anonymity said. The move was part of “national security-related legislative reform,” they added. Under the amendments, arrivals from the Chinese territories would have to reside in Taiwan for
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