It
was unclear what sorts of choices Aso was implying Japan might face,
but the Japanese currency, the yen, has fallen by over 60 percent
against the U.S. dollar since hitting a peak of 75.35 yen to the dollar
in October 2011. It was trading near 123 yen per dollar on Friday.
The
yen's decline has been hastened by massive monetary easing since 2013
by the Bank of Japan, which is buying trillions of yen in assets each
month, seeking to spur growth.
China's
decision to widen the trading band for the yuan, partly to make it more
responsive to market forces, has raised fears that other countries will
also allow their currencies to fall.
While
most economists say such concerns are exaggerated, a few countries have
followed China's lead. Kazakhstan's currency plunged by over 20 percent
against the dollar on Thursday after its government decided to move to a
free float to cope with big swings in global currencies and commodity
prices. Vietnam also allowed its currency, the dong, to weaken slightly.
The
injection of massive amounts of cash into the Japanese economy drove
the yen lower, while in turn boosting profits of major corporations that
earn a large share of their revenue overseas — and pushing share prices
higher.
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