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UPDATE 1-Japan likely to talk of yen worry at G7 – Azumi

by on September 28, 2012 3:05 am BST
 

Thu Sep 27, 2012 11:05pm EDT

* Japan to get new fin min next month in cabinet shakeup

* Strong yen has been a burden on Japan’s exports

* Europe’s woes likely to dominate at G7, IMF meetings

By Stanley White

TOKYO, Sept 28 (Reuters) – Japanese Finance Minister Jun
Azumi said on Friday his successor is likely to talk about the
risks that Japan is facing from a strong yen at a Group of Seven
finance ministers’ meeting next month, as the country’s economic
recovery loses momentum.

Azumi told reporters he hopes the new finance minister will
also discuss the yen at the G7 meeting and meetings of
the International Monetary Fund, which will be held in Tokyo.

It is still uncertain what assurances Japan can expect to
receive about the yen, but its persistent strength has been a
side-effect of the crises that have plagued the global economy
in recent years, as investors tend to favour it as a safe haven
in times of market turmoil.

“The yen is high by historical standards,” Azumi said.

“I am sure the new finance minister will talk about the yen
and Japan’s economic outlook at various meetings. I think it is
necessary to explain the demerits of a strong yen.”

His comments came as data showed Japan’s industrial output
fell to a 15-month low in August, hit by sagging sales in its
top export market China and the confidence-sapping euro zone
crisis, fuelling concerns that the world’s third-largest economy
could slip into recession later this year.

Finance ministers from G7 countries will meet on Oct. 11 in
Tokyo, according to several European officials.

The meetings will take place on the sidelines of separate
meetings for the International Monetary Fund and World Bank.

Japan intervened and sold the yen about a year ago
after it reached a record high versus the dollar, but since then
the yen hasn’t weakened as much as some policymakers and
Japanese exporters had hoped.

Major economies tend to discourage foreign exchange
intervention in favour of free-floating currencies.

However, earlier this year the IMF said the yen is
moderately overvalued, raising hopes among some in Japan that
overseas officials are becoming more sympathetic to Japan’s
complaints about the yen’s gains.

Azumi is to give up his post and become acting
secretary-general of the ruling Democratic Party as Prime
Minister Yoshihiko Noda makes personnel changes to prepare for
an election expected in the coming months.

Noda has yet to announce who will replace Azumi as finance
minister.