The ruling party in Japan is closely monitoring the yen's recent slide towards 160 to the dollar, Reuters reported on Wednesday. While there is no unanimous agreement within the party, the currency's further decline could prompt policymakers to take action. Takao Ochi, a party executive, emphasised that discussions are ongoing but not yet conclusive. If the yen continues its downwards trajectory, reaching 160 or 170 to the dollar, it may be considered excessive, Ochi stated in an interview with Reuters. However, Ochi clarified that the Liberal Democratic Party (LDP) is cautious about hasty measures. As the secretary-general of the LDP's research commission on finance and banking systems, he believes that a thoughtful assessment of the yen's weakness is crucial. Rather than rushing to reverse the decline, the LDP aims to weigh the impact carefully. The yen's recent weakness stems from the substantial interest-rate differential between Japan and the United States. While a weaker yen has both advantages and drawbacks for the Japanese economy, the current situation warrants close attention.
