International policy veteran Rintaro Tamaki, who will become Japan's top currency diplomat in a regular personnel reshuffle at the Finance Ministry, is not expected to make major changes in policy, despite facing a number of thorny issues. Tamaki, who takes over at a time of volatile financial markets and an economy in its worst recession in recent history, will assume his new post as vice finance minister for international affairs on July 14.
"He's well-known and admired within G8 circles," said John Vail, head of global macro strategy and asset allocation at Nikko Asset Management. "His English is better than most American officials'." Besides economic turbulence, Tamaki is faced with a global debate on whether the world should decrease its dependence on the dollar as the main international currency, with some emerging economies such as China and Russia calling for the creation of supra-national currency.
Japan has been saying it would be in no one's interests to drastically change the status of the dollar. Japan has not intervened in foreign exchange markets since 2003 and 2004, when it sold a total of 35 trillion yen ($365 billion) to stem a sharp appreciation in the yen that was seen to be threatening a nascent recovery in the domestic economy.
Its lack of intervention since then is despite the yen's rise to a 13-year high near 87 yen per dollar in January, and many analysts do not expect intervention as long as the yen stays near current levels around 95 yen per dollar.
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