By: Mike Campbell
Seasoned Japanese Financial minister Hiroshisa Fujii has had to step down from his post due to problems of ill health. The 77 year old tended his resignation to Prime Minister, Yukio Hatayama, who had little option, in the circumstances, but to accept it with reluctance. Fujii has recently been hospitalised for high blood pressure and is said to be suffering from exhaustion. Mr Fujii has been replaced by Mr Naoto Kan. Mr Kan faces an unenviable task with some analysts expecting Japan to fall back into recession; the nation is struggling with record levels of unemployment; massive debt problems (currently about 200% of the nation’s GDP); deflationary pressures and low levels of consumer confidence. He lacks the budgetary experience of his predecessor, but has served as a Health minister and is a deputy prime minister.
On his first day in office, Mr Kan has publicly called for a weaker Yen. The nation relies heavily on its exports to maintain its position as the world’s second largest economy. The recent strength of the Yen combined with the relative weakness of the US Dollar, Japan’s principal trading partner, combined with the worst global recession in living memory has hit exports hard. The move represents a departure from the polices of his predecessor who was much more tolerant of a strong Yen. Mr Kan has said he will work closely with the Bank of Japan which some analysts have concluded may mean he will order them to intervene. In rare public comments on the desired value of the Yen, he indicated that the desired level would be 95 Yen to the Dollar. The current value of the Yen is 93.33 to the US Dollar. It will be interesting to see the reaction of the Forex markets to the developments.
Changing Of The Guard At the Japanese Ministry Of Finance
DailyForex.com