(Bloomberg) -- Japan’s finance minister warned fellow cabinet minister Kono Taro to be more cautious when talking about currencies, after the latter’s comments appeared to help the yen strengthen against the dollar.
Speaking in an interview with Bloomberg TV on Wednesday, Digital Minister Kono said the Bank of Japan needs to increase interest rates to boost the value of the yen and bring down energy and food costs. The yen strengthened over 1% in the evening that day, with market participants citing Kono’s remarks as one of the factors behind the move.
“I would like him to be careful in what he says, given that comments could have unexpected impacts on the market,” Finance Minister Shunichi Suzuki said during his regular press conference on Friday.
Suzuki said he himself usually refrains from commenting on FX levels and potential government actions to avoid impacting the market, and Kono had “lacked that sort of awareness” in his comments on Wednesday.
Kono is known for his outspokenness, which in some respects has helped him gain support from the general public, but has made him less popular with other ruling party lawmakers. Kono ran for the Liberal Democratic Party presidency in 2021, finishing a distant second.
In the Wednesday interview, Kono deflected a question about the prospect of launching his own bid to replace Prime Minister Fumio Kishida in the upcoming LDP leadership election in the fall.
Japan’s authorities have been sticking to a strategy of keeping traders in the dark by declining to immediately comment on whether the government has intervened in the market, and generally trying to provide little information on intervention. That made Kono’s remarks on Wednesday stand out.
Japan is seen as having intervened in currency markets twice last week to prop up the yen, spending a total of around ¥5.6 trillion ($35.6 billion).
Kono said Friday during a regular presser that he hadn’t directly requested that the BOJ raise rates, but had simply said that if rates are higher the yen strengthens. He added that monetary policy is left up to the BOJ.
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