Japanese Finance Minister Taro Aso warned market players against pushing up the yen too much further, saying that its spike against the dollar overnight was "rough" and undesirable for the economy. Aso said that while there was no immediate plan for G20 and G7 nations to take coordinated action against the current markets turmoil, global financial authorities were in frequent contact with each other on market developments.
"I would say they are rough, rather than rapid," Aso told reporters after a cabinet meeting on Tuesday, when asked about the yen's spike against the dollar in New York on Monday. "For the economy to grow stably, it's better for (currency and stock price) moves to be gradual and steady, rather than rough," he said. The yen spiked by nearly 5 percent to a seventh-month high against the dollar on Monday as investors, worried about the slowdown in China, sought the Japanese currency as a safe haven.
Japan's Nikkei stock index fell to six-month lows early on Tuesday with investors gripped by fears of a hard landing for the Chinese economy, a major market for Japanese exporters. The market rout is a concern for Japanese policymakers, who worry about the damage it could cause to already-weak exports and on the negative knock-on effects on premier Shinzo Abe's "Abenomics" stimulus policies. Key government officials sounded sanguine for now, stressing that Japan's economy remained on track for a moderate recovery without additional stimulus as companies reap record revenues from past yen declines. "The yen is being bought as a safe-haven asset, which shows that investors think Japan's economic fundamentals are solid," Economics Minister Akira Amari told reporters, adding that it was up to the Bank of Japan to decide whether to deploy additional monetary stimulus.
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