Yen's relentless slide revives Japan's interest in structural reforms
Japanese policymakers are turning their attention to more structural economic factors behind persistent yen declines, convinced that market intervention is limited in its ability to reverse the currency's broader slide.
Data due out on Friday is likely to show Japan spent roughly 9 trillion yen late April through early May to slow the decline in the yen, which hit a 34-year low below 160 to the dollar.
While the wide U.S.-Japan interest rate gap is typically blamed for the yen's declines, the currency's persistent weakness has alerted policymakers to other more fundamental drivers such as Japan's dwindling global competitiveness.
Spear-headed by Japan's top currency diplomat Masato Kanda, the Ministry of Finance (MOF) set up a panel of 20 academics and economists this year to drill into the country's current account for reasons behind the structural issues.
However, Kanda has said foreign exchange itself is not within the scope of the panel's discussion.
During its four meetings since March, the panel discussed measures to strengthen Japan's global competitiveness and divert profits earned overseas to boost domestic growth, according to presentation materials and minutes released by the ministry.
«The Japanese themselves are no longer investing in Japan. Profits earned overseas are not returning home and reinvested aboard, while inbound foreign direct investment remains small,» a senior government official said.
«This issue needs to be addressed with structural reform,» said the official, who spoke on
