TOKYO: Japanese government officials are increasingly worried about the yen’s rapid depreciation after the dollar hit a 20-year high above 126 yen in Tokyo trading Wednesday.

They are concerned that a further drop in the yen will batter the Japanese economy and personal consumption by pushing up import prices.

“Foreign exchange rates need to be stable and their rapid change is not desirable,” Chief Cabinet Secretary Hirokazu Matsuno told a news conference.

Finance Minister Shunichi Suzuki told reporters that the government “will closely watch exchange rates with a sense of tension.”

Concerns are growing also among businesses that higher import prices may hurt their earnings.

Issei Horino, president of restaurant chain Saizeriya Co., told a news conference that the current situation is “horrible, as the yen’s weakness affects all imported products.”

Speaking at a press conference, Yoshinoya Holdings Co. President Yasutaka Kawamura said, “The impact will emerge gradually on a half-year or one-year basis.”

Wednesday’s drop in the yen was triggered by Bank of Japan Governor Haruhiko Kuroda’s remarks stressing the central bank’s intention to keep monetary policy accommodative.

The government aims to take all possible measures to avoid an economic downturn as it is accelerating efforts to recover the economy from the COVID-19 pandemic.

It plans to draw up emergency steps later this month to cushion the impact of higher prices for crude oil, raw materials, grains and other items following Russia’s invasion of Ukraine.

The government may be forced to take further measures later if prices rise further due to the yen’s weakness.

JIJI Press