The strong yen poses a risk of “hollowing out” Japan’s core industries, as well as the rebuilding efforts after the March natural disasters, the country’s new prime minister Yoshihiko Noda said.
"We hear screams from exporters and from the small and mid-sized companies that have led our country’s industries,” Noda said. If things go on like this, domestic industries could be broken and jobs could be wiped out, he added.
Japan is currently undergoing a crisis of unprecedented industrial hollowing-out, Noda said.
Last month, the yen has reached a post-World War II record, after a six-month period of continuous growth following this spring’s quake and tsunami.
The authorities have orchestrated three interventions in the market during the last year, but none had a significant success.
Noda said that every possible policy measure has to be taken, in cooperation with the Bank of Japan, adding that the next supplementary budget would include emergency measures to help the economy.
Japan’s newly appointed finance minister Jun Azumi has also recently warned about the dangers that a strong yen is posing on the country and also on the global economy.
Azumi said that the yen’s current strength is not justified from an economical point of view and makes the life of Japanese exporters difficult.