Rintaro Tamaki, who served as Japan’s Vice Minister of Finance for International Affairs from 2009 to 2011, reflected on past interventions in the currency market, particularly during the tumultuous period following the March 2011 earthquake and Fukushima disaster. He emphasized that these interventions were aimed at stabilizing markets, but also underscored the limitations of such measures in addressing fundamental economic issues.
Tamaki pointed out that the current weakness of the yen is partly due to interest rate differentials between Japan and the United States, as well as Japan’s deteriorating fiscal health. He acknowledged that while interventions such as selling dollars and buying yen may have a psychological impact on the markets, they are unlikely to address the underlying structural problems or provide long-term support for the yen.
Nevertheless, Tamaki expressed that measures aimed at slowing the yen’s decline could be considered acceptable. His comments come at a time when market participants are closely monitoring Japan’s currency policy and its effectiveness in the face of ongoing economic challenges.