Japan says ready to act if needed to quell market swings
TOKYO (AP) — Japan is ready to “take appropriate measures,” if necessary, to quell volatility in the financial markets, a top government spokesman said Tuesday.
Chief Cabinet Secretary Yoshihide Suga told reporters that Japan’s economy, the world’s third-largest, is still “on track for a moderate recovery,” despite the roller-coaster market gyrations of recent weeks.
But Suga acknowledged that recent swings in share prices and foreign exchange markets have taken a toll.
“What is important is to be alert to developments at home and abroad,” said Suga, who added that Japan was prepared to work with other major industrial nations to handle the global market declines.
“If necessary, we are going to take appropriate measures,” Suga said, without giving any details.
On Tuesday, Japan’s main share index, the Nikkei 225, sank 4 percent to 17,806.70 in a session that saw the benchmark swing between positive and negative territory. It fell 4.6 percent on Monday.
Share prices had surged in Japan over the past three years on strong monetary stimulus and a weakening in the yen, which has significantly boosted profits of major export manufacturers.
However, the recent market volatility, largely linked to fears over China’s economic slowdown, has pushed the value of the yen higher against the U.S. dollar. It was trading at 119.19 yen late Tuesday, after beginning the week at about 123 yen to the dollar.
By the market’s close on Tuesday, Toyota Motor Corp. was down 3.9 percent, industrial robot maker Fanuc Corp. fell 3.4 percent and Panasonic Corp. lost 4 percent.
Asked about the “stronger yen,” Suga scoffed that the yen’s level was still within expectations, noting that it was trading near 80 yen to the dollar three years ago.