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Japan finance minister says no ceiling proposed for next year’s budget

Officials said markets could overreact if the initial budget is larger than prior years, while the USD/JPY was last up 0.03% to 163.47.

Reported · Written up by our desk · Major Pairs

Japan’s Finance Minister Satsuki Katayama said officials proposed no ceiling on next year’s budget requests, according to FXStreet. Katayama added that the government needs to make year-on-year comparisons because the initial budget could come in larger than in prior years, which could prompt an overreaction from markets.

FXStreet also reported that officials said there has been no need to surpass reserves in the current budget after the Kumamoto earthquake. The outlet said the priority is fully explaining fiscal policy to markets.

At the time of writing, FXStreet noted the USD/JPY pair was up 0.03% on the day, trading at 163.47. The article said the yen’s value is influenced by Japan’s economic performance and, more specifically, Bank of Japan policy and the differential between Japanese and US bond yields, as well as risk sentiment among traders.

The outlet added that the BoJ has a currency-control mandate and has intervened in currency markets at times, generally to lower the yen, while avoiding it often due to political concerns with major trading partners. FXStreet said the BoJ’s gradual shift away from ultra-loose policy has supported the yen more recently, even as it has narrowed the US-Japan bond yield differential that has favored the US dollar.

Latest closeUSD/JPY 163.42 ▼0.2%

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