To combat “excessive, one-sided” yen movements, Japan must take action, according to the deputy chief Cabinet secretary

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Last Updated on September 11, 2022 by Bitfinsider

Seiji Kihara, the deputy chief cabinet secretary, reiterated official warnings over the yen’s drop to 24-year lows on Sunday (Sept. 11), saying that Japan’s government must take action as needed against excessive yen declines.

As investors pay attention to the growing gap between the U.S. Federal Reserve’s aggressive interest rate hikes and the Bank of Japan’s (BOJ) commitment to maintaining ultra-low rates, the yen has recently dropped to 24-year lows against the dollar.

Kihara added that the government will think about taking action “in the not too distant future” to further open Japan’s borders to foreign tourists, such as by removing a daily entry cap.

Beginning on September 7, Japan loosened border controls by increasing the daily admission cap to 50,000 and allowing travelers on package tours to enter without a guide.

According to analysts, removing the cap and permitting more travelers would be essential to luring foreign capital into Japan and reviving its flimsy economy.

Kihara said he wouldn’t rule out issuing government debt as a way to pay for an anticipated increase in Japan’s defense budget.

The administration stated its intention to significantly expand defense spending “over the next five years” in a policy roadmap published in June. This statement highlighted Tokyo’s interest in bolstering defense at a time when tensions with its powerful neighbor China are rising.

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