### Japan’s Response to Foreign Exchange Market Movements

#### Former Currency Chief Issues Warning
– Masato Kanda, a former currency chief and current special adviser to Prime Minister Shigeru Ishiba, has issued a warning regarding excess movements on the foreign exchange market.
– Currency market volatility has increased due to recent changes in monetary policies and political situations in major countries.
– Japan will take appropriate action against excessive foreign exchange volatility.

#### Impact of Weaker Yen
– The Japanese currency has weakened to a three-month low, nearing the authorities’ line in the sand at 160 to the dollar.
– Japan’s trade surplus has disappeared due to rising energy import costs and offshore production, reducing the positive impact of a weak yen on exports.
– A weaker yen is causing increased import costs, putting pressure on ordinary people’s lives.
– Export-oriented companies are not benefiting from a weaker yen as they are shifting production abroad instead of increasing exports.

#### Long-Term Solution
– While short-term movements are driven by speculation, the long-term solution to strengthening the yen lies in structural reforms to boost the economy.
– A weak yen leads to an outflow of wealth, increasing expenditure on energy imports.

### Analysis
Masato Kanda’s warning highlights the challenges Japan faces with a weaker yen and the need for appropriate action to stabilize the currency market. The disappearance of Japan’s trade surplus and the negative impact of a weak yen on import costs emphasize the urgency for structural reforms to strengthen the economy in the long run.

For individuals, a weaker yen can lead to increased costs of imported goods and potentially impact their purchasing power. Understanding the implications of currency movements on the economy can help individuals make informed decisions about their finances and investments. Keeping an eye on how Japan responds to excess movements in the foreign exchange market can provide valuable insights for investors and the general public alike.

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