TOKYO: Japan is ready to act if necessary to cope with turmoil in financial markets, a government official said Wednesday, as stocks fell and the yen surged on Donald Trump’s shock victory in the US presidential election.
“We are seeing extremely rough moves in the financial markets, including foreign exchange,” said Masatsugu Asakawa, vice-minister of finance for international affairs.
“We will take necessary measures if speculative moves continue further,” he said.
Asakawa, who spoke after a meeting between the Finance Ministry, the Financial Services Agency and the Bank of Japan, used language often employed by Japanese officials to signal possible currency intervention to weaken the yen.
A strong yen hurts the bottomline of Japan’s exporters, making their products more expensive in overseas markets and denting the value of profits earned abroad.
In Tokyo trading, the dollar slumped to 102.10 yen from above 105 yen seen earlier in the day.
The benchmark Nikkei 225 index plummeted 5.4 percent, or 919.84 points, to close at 16,251.54 after a wild day of trading. The broader Topix index of all first-section issues dropped 4.57 percent, or 62.33 points, to 1,301.16.
The crisis talks were arranged as stock and currency markets convulsed on Trump’s strong showing in Tuesday’s consideration, Bloomberg News reported.election.
Asakawa said, however, that joint action by the Group of Seven nations — Japan, the US, Canada, Germany, German, France and Italy — was not currently under
In Seoul, South Korean financial regulators and bankers scrambled to come up with countermeasures against possible fallout impacts from Trump’s surprise victory.
“It is expected that expanded volatility in our financial market will be inevitable for the time being,” Financial Services Commission Chairman Yim Jong-Yong said during an emergency meeting following the US election results.
“We will thoroughly analyse the impact of the new US administration’s economic and financial policy directions on our economic and financial sectors and respond accordingly,” Yim said.
The Korean won slumped 1.2 percent against the US dollar on Wednesday and the benchmark KOSPI was down 2.25 percent at the close.
Concern in Japan, a close security ally of the US and a major trading partner, had grown during the campaign, partially over Trump’s opposition to the Trans-Pacific Partnership free trade agreement.
“If Trump pushes through his election pledges, regardless of whether other countries react adversely or not, it would change the whole picture of America-led free trade programmes, so we should keep in mind that trade agreements, including the TPP, may have to be renegotiated,” Daiwa Securities senior strategist Shuji Hosoi told AFP.