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By Tetsushi Kajimoto
TOKYO, Oct. 7 (Reuters) – Japan’s Finance Minister Shunichi Suzuki on Thursday warned of any sudden currency movements, saying he was closely monitoring the forex market as the yen hovered near its lowest 18 months against the dollar.
The new finance minister made the comment when asked about the recent weakening of the yen in an interview with a small number of media outlets. The yen has lost about 8% against the dollar since the start of this year.
Japanese policymakers tend to warn of a sharp rise in the yen, which would hurt the export-dependent economy. But Suzuki’s comments suggest authorities are also concerned about a rapid weakening of the yen, which would increase import costs for a resource-poor country.
“Currency stability is important. We will be watching closely for movements in the currency market,” Suzuki said.
“I will refrain from commenting on currency levels,” he added.
Suzuki took office on Monday, succeeding his predecessor and brother-in-law Taro Aso in the new cabinet of Prime Minister Fumio Kishida.
The dollar has been in an uptrend amid nervousness that soaring energy prices could spur inflation and interest rate hikes. A large interest rate differential between Japan and the United States also helped support the dollar against the yen.
The yen stood at 111.30 against the dollar, remaining in view of the 18-month low of 112.08 seen last Thursday.
When asked about a planned stimulus package, Suzuki declined to comment on its size and content, saying he will have to discuss the issue with the ruling coalition.
The minister reiterated the government’s goal of achieving a primary budget surplus by the fiscal year ending March 2026, even though its heavy stimulus spending seemed to make it an even more elusive goal.
Suzuki pledged to compile a “high quality budget” for the next fiscal year, stressing the need for “wise spending and spending reform”. (Report by Tetsushi Kajimoto, edited by Chang-Ran Kim and Ana Nicolaci da Costa)