© Reuters. FILE PHOTO: Japan’s new prime minister Fumio Kishida delivers his first coverage speech at parliament in Tokyo, Japan, October 8, 2021. REUTERS/Kim Kyung-Hoon
By Leika Kihara and Tetsushi Kajimoto
TOKYO (Reuters) -Japan’s Prime Minister Fumio Kishida stated on Tuesday the federal government will scrutinise the influence on the financial system from any additional declines within the yen, which danger hurting company earnings.
Japan’s wholesale inflation hit a 13-year excessive in September as rising world commodity costs and a weak yen drove up enter prices, including extra stress on companies already hit by provide constraints and clouding the outlook for the financial system.
“If the yen weakens additional, it would enhance exports. However, it would result in an increase in prices for corporations by means of greater import prices,” Kishida advised parliament.
“We are going to carefully watch the influence of foreign money strikes on corporations,” he stated, when requested by an opposition lawmaker on how the federal government would reply to extreme yen declines.
The federal government will assist small and midsize companies address the rise in prices by means of monetary assist and steps to spice up their productiveness, he added.
Japanese policymakers have traditionally welcomed a weaker yen because it makes the export-reliant financial system’s items extra aggressive overseas.
However home companies are additionally susceptible to rising prices from a weak yen, given the nation’s heavy reliance on imports for gas, uncooked materials and meals.
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