Markets
New Japanese Finance Minister Echoes European Sentiment on Currency Swings
Kiplinger News
June 9, 2010
Sharp movements in currencies can have a deleterious effect on growth, Japanese finance minister Yoshihiko Noda said at a press conference June 8.
His comments parrot those made by Hiromasa Yonekura, the head of the Keidanren business organization, on June 7. Yonekura said that currency swings were the "worst thing" that can happen to multinational companies, according to Bloomberg.
Sentiment in Japan appears to be similar to that in Europe - even though the regions' currencies are moving in opposite directions. European Central Bank executive board member Lorenzo Bini Smaghi said on May 28 that fears around the euro would make it significantly more difficult for euro-zone nations to pull themselves out of the current crisis.
"The cost of the support package could only increase following such dramatic declarations [of the impending failure of the euro]," he said.
Even American companies are feeling the effects of recent currency swings: Both McDonald's and Burger King announced recently that they expected to take a charge this year on currency effects.
There's little that policymakers can do to make currencies more palatable to investors. What they may attempt to do, though, is mitigate the anxiety that has swirled around the currency markets of late.
