Japan’s finance minister calls for a weaker yen

JAPAN’S new finance minister yesterday called for a weaker yen and said he would work with the Bank of Japan to achieve an appropriate level, prompting a sharp slide in the currency against the dollar.

In his first press conference as finance minister, Naoto Kan also signalled he would maintain pressure on the central bank to do more to lift the frail economy, which the government fears could slip back into recession as deflation hurts demand.

He also lived up to expectations that he would not be as fiscally restrained as his predecessor by saying he would be open to spending more in the future if the economy weakens. He had not felt bound by fiscal austerity when the cabinet last month agreed on a budget for 2010/11, he said.

Kan saved his most direct remarks for the foreign exchange market, calling for a weaker yen and stirring speculation the government may be more inclined to stem a sharp yen rise.