TOKYO (Reuters) – Japan lacks effective means to deal with a sharp fall in the yen as unilateral intervention in the currency market could be critical to reversing its decline, said Satsuki Katayama, head of Japan’s ruling party’s financial affairs committee. The impact is limited, said.
She told Reuters that “intervention in the currency alone would not be as effective” to prevent the yen from falling sharply, driven by the spread between the U.S. and Japan.
Raising Japan’s ultra-low interest rates is also difficult given the possible impact on the country’s 550 trillion yen ($3). trillion) bank loans, Katayama, chairman of the Liberal Democratic Party’s (LDP) Financial and Banking System Research Committee, said on Wednesday.
A former Ministry of Finance (MOF) official, Katayama has deep expertise in financial markets.
Japanese authorities on Wednesday hinted at the possibility of intervening to shore up the yen and bank rate checks, but many analysts doubted Tokyo would really intervene.
($1=143. 3300 Yen)
