Gov't unveils series of measures to deal with strong yen
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36 / M / Toronto, Canada
Posted 9/21/11 , edited 9/21/11

The Japanese government on Tuesday unveiled an interim report on a series of measures aimed at preventing the persistently high yen from squeezing the nation’s economy and industry.

“The package is aimed at not only cushioning the (yen’s) impact but also at reinforcing the economy so it is not swayed by currency fluctuations,” said Motohisa Furukawa, state minister in charge of economic and fiscal policy.

“It is also intended to make the most of the merits of the strong yen,” Furukawa told a news conference.

The interim report said Japan would be ready to take “decisive steps whenever necessary,” indicating possible interventions on the forex markets.

The package included measures to substantially increase subsidies for companies that want to establish facilities in Japan.

The interim report also included a plan to set up “eco subsidies for energy saving” to push forward demand for such facilities as lithium ion batteries and solar power generation systems for housing.

Most of the measures, also including financial support to small- and medium-sized firms struggling with the strong yen, will be included in the forthcoming third supplementary budget for the current fiscal year.

“The size of the measures will be decided in the process of compiling the third extra budget. We intend to decide on details as soon as possible,” Furukawa told a news conference.

The strength of the Japanese currency, which in August hit a post-war high against the dollar, has walloped outward-facing manufacturers in a country that is heavily dependent on exports.

A high yen makes Japanese products expensive for overseas buyers and diminishes the value of repatriated profits. But it also makes foreign purchases more attractive for companies wishing to expand overseas.

In his inaugural policy speech last week, Prime Minister Yoshihiko Noda said the rise of the unit meant Japan was facing “a crisis of unprecedented industrial hollowing-out.”

He warned that unless measures were taken “domestic industries could go downhill and jobs could be lost. If that happens, it would be almost impossible to break out of deflation and reconstruct areas” affected by the March 11 quake and tsunami.

The yen has rocketed in value over recent months as financial uncertainty in Europe and the United States continues to send global traders scurrying into the safe-haven currency.

Despite three interventions in the markets in the past year, two of which were carried out by Tokyo alone, the yen has remained strong.

On Tuesday, the unit was trading at 76.56 yen to the dollar.
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29 / Norway
Posted 9/21/11 , edited 9/21/11
Love these threads, especially when OP doesn't even add his own opinion about the news.
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36 / M / I'm around
Posted 9/30/11 , edited 9/30/11
76 yen per dollar?! Christ, that is strong. The last time I exchanged for yen, it was around 110 yen per USD. But that was 2006.
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