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Japan's new finance head faces tough economic road
(Agencies)
Updated: 2009-09-17 16:08 Fujii has already made waves by coming out against intervention in foreign exchange markets and suggesting that a strong yen is not necessarily a bad thing. The dollar hit a seven-month low against the Japanese currency after his comments this week, edging into the lower 90-yen range. Under Liberal Democratic rule, Japan had favored a weaker yen, which benefited exporters like Toyota Motor Corp. and Sony Corp. As the yen rises, the value of their overseas profits shrinks and products become more expensive for consumers abroad. The Democrats, including Fujii, argue that a stronger yen is good for Japanese consumers and their purchasing power. "The DPJ's basic political ideology is to redistribute income in favor of consumers, taken from firms, especially exporters, which were the main beneficiaries under the LDP government's weak yen policy," said Masaaki Kanno, chief economist at JPMorgan Securities Japan Co., in a report. Business groups may be wary, but so far they are holding back, waiting to see what the new government tackles. Although it was critical of the Democrats' policies during the campaign, the Keidanren, Japan's biggest business lobby, issued an upbeat statement Wednesday. "The lineup of the Hatoyama Cabinet clearly shows its utmost resolve to tackle various issues," it said. "The Hatoyama Cabinet was launched on the back of mounting public hopes for change."
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