After the significant fluctuations in the Japanese financial market, the Japanese government and central bank attempted to unify their positions in order to restore market calm.
On Tuesday (August 6th) local time, Japanese Prime Minister Fumio Kishida told the media, "It is important to make a calm judgment in this situation. I hope to continue to maintain a sense of urgency, closely monitor the development of the situation, and work closely with the Bank of Japan
The day before, the US dollar fell below the 142 level against the Japanese yen, reaching its lowest level since the beginning of the year; The Nikkei 225 index plummeted 12.40% on the same day, recording its largest daily decline since Black Monday in 1987.
30 minute chart of USD/JPY
Fortunately, the Japanese stock market rebounded significantly in the following two trading days and has now risen to near last Friday's closing price. At the same time, the Japanese yen exchange rate has also fallen to around 147 yen per US dollar.
On Tuesday, the Japanese Ministry of Finance, Bank of Japan, and Financial Services Agency held a trilateral meeting. Recently, Atsushi Mimura, the newly appointed director of the International Bureau of the Japanese Ministry of Finance, stated that their views on the path of economic recovery remain unchanged.
At the end of last month, Jun Sanmura officially took over as the head of international affairs for the Ministry of Finance from Shinto Kanda. This position will be responsible for overseeing Japan's foreign exchange policy and coordinating economic policies with other countries.
He said that the meeting discussed stock market trends and did not comment on the reasons behind stock price fluctuations. The financial market is influenced by multiple factors, and as a government, we cannot clearly identify what drives the market
Sanmura Jun pointed out that some market observers attribute recent market fluctuations to the sudden emergence of global risk aversion, which is triggered by concerns about the slowdown of overseas economies and the intensification of geopolitical tensions, including in the Middle East.
Jun Sanmura stated that it is important for foreign exchange stability to reflect economic fundamentals, and the authorities will continue to closely monitor the foreign exchange market and communicate with overseas counterparts. He emphasized that there should be no panic about the market situation, and the mild recovery of the Japanese economy has not changed.
Earlier this day, Shinichi Uchida, Deputy Governor of the Bank of Japan, also mentioned that "the market has been extremely volatile recently, and we will be highly vigilant in monitoring the impact on the economy and prices, and make appropriate responses in terms of policy guidance
Sanaichi Uchida also emphasized that the Bank of Japan will carefully consider the conditions of the financial market in its future interest rate policy decisions.
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