Japan Appoints New Currency Chief as Yen Weakens to 38-Year Low

In the face of a rapidly weakening yen, Japan has appointed a new official to oversee its currency policy. Atsushi Mimura, a veteran in financial regulation, takes over as the Vice Finance Minister for International Affairs, replacing Masato Kanda. Kanda’s tenure was marked by the weakest yen in nearly four decades and record-breaking government intervention to support the currency.

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Mimura’s appointment comes as the yen hit a fresh 38-year low against the US dollar at 161.27 yen per dollar. This decline is attributed to factors like a widening interest rate gap between Japan and the US. The market now anxiously awaits key inflation data from the US, which could further roil currency markets.

While Mimura is expected to follow the established policy of advocating for a stable yen reflecting economic fundamentals, all eyes are on whether he will continue the aggressive intervention tactics employed by his predecessor. Kanda oversaw a historic 9.8 trillion yen intervention in April and May to curb the yen’s slide.

Analysts suggest that Mimura might face a challenging baptism by fire, with the next potential intervention point being around 164.50 yen per dollar. The success of his strategies will be closely watched as Japan grapples with a weakening currency that can benefit exporters but hurt consumers by driving up import costs.

News source- https://www.straitstimes.com/business/japan-names-new-currency-czar-as-yen-continues-its-slide-nikkei-reports

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