Forex money - Japan should not intervene in the
forex currency markets unless exchange rates fluctuate abnormally, a senior opposition lawmaker said Thursday when asked about the recent strength of the yen against the dollar.
The main opposition Democratic Party has its best chance to win Prime Minister Taro Aso's ruling Liberal Democratic Party (LDP) and its smaller coalition partner in an imminent national election, ending half a century of almost uninterrupted by the conservative LDP .
"forex Currency rates should not be moved artificially, as they reflect the strength of the economy. If Japan's economy is strong, so is the yen and weaker than if the U.S. economy, the dollar will strengthen . It is very natural, "Hirohisa Fujii, a senior adviser to the Democrats, told Reuters in an interview.
"Unless the forex currency moves are abnormal, I do not think we should intervene in forex currency markets."
Fujii, 77-year-old former finance ministry official, is seen by political analysts and party members from running for a key position in economic policy if the Democrats win the elections to be held in October.
He served as finance minister in an anti-LDP coalition, from 1993 to 1994.
It is not clear that a government of the Democratic Party to be appointed as finance minister. Masaharu Nakagawa, the finance spokesman for the party, Fujii and touted as potential candidates, but analysts say that the post could go to other veterans.
Japan has a long history of trying to stop the intervention by the yen to buy dollars, but has remained outside the market from 35 trillion yen ($ 373 billion) a year over 15 months ending March 2004 .
The yen touched a maximum of five months of 91.80 yen per dollar last week, raising concern about the impact on Japan, which depend on the export economy as it emerges from its deepest recession since the Second World War.
Fujii also said that Democrats see no need to change in Japan's $ 1 trillion dollars of foreign exchange reserves, second largest in the world after China.
"It is a fact that confidence in the dollar remains high and is very natural for Japan to manage its reserves which it is hoped the majority of (the markets)," he said.
"The same applies to the currencies and stocks, and we must acknowledge as a fact in a free market economy."
Fujii shrugged the comments made by Nakagawa said that Japan should avoid the purchase of forex dollar-denominated U.S. bonds because of forex currency risk.
"About 60-70 percent of the way it is implemented should not be changed, this is a condition for a change of government. If it has changed 100 percent, which would be a revolution," said Fujii.
"The weight of the dollar in reserves is one of those topics that should not be changed only by a change of government happens."
He also said that the Democrats what they consider to cut wasteful spending in Tokyo from $ 160 billion stimulus measures, which he said includes expenditures such as construction projects, to reduce new bond issues totaling a record 44.1 trillion yen in the fiscal year that began April 1.
"The supplementary budget (for the current fiscal year to next March) is a fake," said Fujii. "It is important to reduce more than 10 percent of new government bond issues. This is important both for the fiscal health of Japan and JGB markets." ($ 1 = 93.74 Yen) - Reuters - Forex money
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