The Ministry of Finance, the Financial Services Agency, and the Bank of Japan held a three-way meeting and agreed to “closely monitor” stock price fluctuations.
The Ministry of Finance, the Financial Services Agency, and the Bank of Japan held an information exchange meeting (trilateral meeting) on international financial capital markets from 3:00 p.m. on the 6th. They discussed the volatility of the Nikkei average on the Tokyo stock market and the yen’s exchange rate on the foreign exchange market, and agreed that the outlook for improvement for the Japanese economy remains unchanged. This will be the first three-way meeting since March. Prime Minister Fumio Kishida also said at a press conference in Hiroshima on the 6th about the stock price fluctuations, “It is important to calmly assess the situation.” “We will continue to monitor the situation with a sense of urgency, and will work closely with the Bank of Japan to advance economic and fiscal management,” he said. The three-party meeting was held at the Ministry of Finance, and discussions were held among the Ministry of Finance’s Vice-Minister of Finance Jun Mimura, Financial Services Agency Commissioner Hideki Ito, and Bank of Japan Executive Director Tsuyoshi Kato. Speaking to reporters after the meeting, Mimura said that despite the current fluctuations, “we all agreed that there is no change in the outlook for a gradual improvement in the Japanese economy.” They also confirmed that the government and the Bank of Japan will closely monitor economic conditions both at home and abroad, and will work together in close communication to manage the economy and finances. Regarding exchange rates, they once again agreed that it is desirable for them to move in a way that reflects fundamentals (basic economic conditions). While saying that the government would refrain from commenting on stock prices, Mimura said, “Listening to market participants, there is a view that there has been a rapid global move toward risk aversion against the backdrop of concerns about a worsening economy overseas due to weak economic indicators and rising geopolitical tensions.” Regarding whether the Bank of Japan’s additional interest rate hike had an impact, he merely said, “Various factors are being discussed, and this is not something that can be analysed to determine what the factors were.” With stock prices falling worldwide, he said, “I myself am in contact with overseas authorities.” The three-way meetings began in March 2016 and have been held irregularly in response to sudden changes in financial and capital markets, such as the depreciation of the yen and soaring crude oil prices. The aim is to prevent market confusion by showing a willingness to hold joint discussions among the three parties. In addition to the Vice-Minister of Finance, the Commissioner of the FSA, and the Director General for Planning, the meeting is often attended by the Vice-Minister for Finance, who is responsible for macroeconomic research and coordination with the Bank of Japan, as well as senior international officials from the FSA and the Bank of Japan. The Nikkei Stock Average closed on the 5th at about 4,400 yen lower than the previous week’s close, its biggest drop ever, due to concerns about the future of the U.S. economy. With the Bank of Japan’s additional interest rate hike also raising concerns about the narrowing interest rate gap between Japan and the US, the yen temporarily hit a level of 141 yen to the dollar on the 5th, the highest level in about seven months, leading to a further fall in stock prices. On the 6th, the Nikkei Stock Average closed with a sharp rebound of 3,217 yen higher than the previous day. Market turmoil continues, with the yen trading at around 145 yen.
>>1 I don’t want to just get a bunch of n-pop either, so I’ll just chat in the room I listen to Cooler in while driving her to and from school and say “I’m being careful.” Maybe I’ll try this job?
The current 25% limit should be lifted and GPIF pension funds should be allowed to invest unlimited amounts of their funds in the Japanese stock market.
If the government intervenes, nothing good will come of it, so keep an eye on it. The current situation is the result of the yen being depreciated and ETFs being bought to forcefully inflate the yen.
Originally, Ueda was supposed to be cautious about raising interest rates, but now that he has succumbed to political pressure and raised interest rates, it’s no wonder hedge funds are jumping on the bandwagon. Is it really okay to just watch?
The Ministry of Finance is an amateur when it comes to economics, the Financial Services Agency is at the mercy of the Ministry of Finance, and the Bank of Japan is causing financial confusion by saying unnecessary things.
If you get too excited or upset about stock prices you won’t be able to raise interest rates in the future lol You should be prepared for the stock price to fall below 20,000 koku before you raise interest rates lol.
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