Japan appointed a new currency diplomat on Friday after the yen hit its lowest level in 38 years. The new exchange rate exceeded 161 yen per US dollar, heightening expectations of imminent market intervention from Tokyo.
Atsushi Mimura, an experienced financial regulatory professional, replaced Masato Kanda. Earlier this year, Kanda initiated the largest intervention in history to support the yen and frequently criticized speculators for the sharp decline in the Japanese currency.
Mimura will assume his new position on July 31, immediately following the G20 finance ministers and central bank governors meeting in Rio de Janeiro.
Market observers do not expect significant changes in Japan's foreign exchange policy despite the personnel changes. Hideo Kumano, Chief Economist of the Dai-ichi Life Research Institute Economic Research Department, noted that Kanda's departure might affect policy communication, but the overall direction will remain the same.
The Minister of Finance of Japan Shunichi Suzuki confirmed that authorities are prepared to take action in response to excessive market volatility. He expressed deep concern about the impact of the yen's rapid and one-sided movements on the economy.
The sharp fall in the yen increases the cost of imports, adding to inflationary pressures and making life more difficult for households and businesses. That being said, a weakening yen benefits Japanese exporters.
On Friday, the yen traded at 161.27 to the dollar, its lowest level since 1986. Experts believe that the next key mark for the authorities is 164.50 yen per dollar. According to Daisaku Ueno, chief FX strategist at Mitsubishi UFJ Morgan Stanley Securities, interventions could occur before this level is reached.
Atsushi MIMURA, a current Deputy Director-General at the International Bureau of the Japanese Ministry of Finance, brings extensive experience in financial regulation and international financial relations.
He played a crucial role in founding the Financial Stability Board at the Bank for International Settlements in Basel during the peak of the global financial crisis in 2008-2009.
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