Japan’s Finance Minister Taro Aso expressed worries about the yen’s continual rise, calling it “rapid” and hinting at the strong currency’s impact on exports as Japan struggles through a recession.
The yen’s rise came after Japan’s economy is bottoming out from its steepest decline, with the government considering restarting the economy while preventing a second wave of coronavirus infections.
The yen steadied at 107 against the dollar under Prime Minister Shinzo Abe’s leadership.
The dollar fell to a 4 ½-month low of 104.52 per yen on Friday as investors feared that the rising COVID-19 cases in the United States could stall its economic recovery.
A government panel said that Japan’s economy peaked in October 2018 and then fell into recession. This suggested that the world’s third-largest economy was struggling even before the coronavirus outbreak.
Added exports account for no more than 20% of Japan’s economy, suggesting that the yen’s rise won’t have a sudden impact on its economy. However, Aso’s warning emphasized the government’s efforts to boost external demand.