Japanese leader braces for another Democrat entering the White House
TOKYO — A shock wave ran through Japan’s Finance Ministry in early November after news broke of Joe Biden’s presumed victory in the U.S. presidential election — not because of the outcome of the race, but because of an order from the prime minister’s office.
“Make sure the yen-dollar exchange rate does not cross the 100 yen mark,” Prime Minister Yoshihide Suga told Finance Ministry officials. His comment, which was confirmed by multiple sources, came with an unspoken message: Be prepared to sell yen for dollars in case the Japanese currency breaches the key threshold.
Suga’s willingness to consider an intervention — an option often seen as a last resort — took many by surprise.
Tokyo-listed exporters need the yen to stay at 100.2 to the dollar or weaker in order to turn a profit, according to a January survey by the Cabinet Office. Any stronger and their earnings would suffer, which in turn would weigh down their stock prices and kick off a negative feedback loop that squeezes the Japanese economy as a whole.