Japan PM Abe tells finance minister to take needed FX steps post-Brexit vote

Mon Jun 27, 2016 6:06am EDT
 
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By Minami Funakoshi and Tetsushi Kajimoto

TOKYO (Reuters) - Japanese Prime Minister Shinzo Abe on Monday instructed Finance Minister Taro Aso to watch currency markets "ever more closely" and take steps if necessary, in the wake of Britain's historic vote to leave the European Union.

Abe made the comments at an emergency meeting with Aso and Bank of Japan Deputy Governor Hiroshi Nakaso as some analysts speculate the central bank may ease if it calls an unscheduled policy review before its planned July 28-29 gathering.

While Abe ordered the BOJ to ensure ample liquidity in markets, his government is ready to provide the economy fiscal support, with an eye on expanding planned stimulus steps to total more than 10 trillion yen ($98.03 billion), sources told Reuters.

"Risks and uncertainty remain in financial markets," Abe said. "We need to continue to work toward market stability."

The yen JPY= briefly soared above the key threshold of 100 to the dollar on Friday as investors hoarded the safe-haven currency after the Brexit vote, unnerving Japanese policymakers worried about the effect a strong yen could have on exports.

Japanese authorities have threatened to intervene if they see yen rises as excessive, though market players doubt Tokyo will step in, given strong opposition from Washington.

"I was instructed by the prime minister to take various, aggressive responses to ensure stability in financial and currency markets," Aso told reporters after the meeting.

  Continued...

 
Japan's Prime Minister Shinzo Abe arrives at his official residence for attending a meeting of relevant cabinet ministers to discuss Britain's exit from the European Union, in Tokyo, Japan, June 24, 2016. REUTERS/Issei Kato