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Politics

Japan to stay vigilant on forex risks: chief cabinet secretary

Suga expects to advance alliance with US under Trump

Chief Cabinet Secretary Yoshihide Suga

TOKYO -- Japan's government will make every effort to shield domestic companies from undue influence sparked by wild swings in the currency market, Chief Cabinet Secretary Yoshihide Suga said in a recent interview with The Nikkei. Suga sees risk management in this field as one of his key tasks.

Excerpts from the interview follow.

Q: What will be the focus of economic and monetary policies next year?

A: It is extremely important to create an environment for Japanese companies to make planning easier. One crucial area in which I am charged to manage risks involves foreign exchange. I am making the Finance Ministry, the Financial Services Agency and the Bank of Japan have joint meetings.

About forex, many say we had to do nothing [to produce the weaker yen amid the market rally after the U.S. presidential election]. But what we see now is a result of solid risk management on our account. In the past, Japan had been at the mercy [of external factors.]

Q: What specific steps can you take?

A: There are many possibilities. We are highly conscious of foreign exchange rates and cannot make half-hearted decisions.

Q: On the diplomatic front, what relations would Japan seek to build with the U.S. under a Donald Trump presidency?

A: Freedom, democracy, basic human rights, rule of law -- the Japan-U.S. alliance sharing these universal values is the fundamental core of Japan's diplomacy and security policies. We will further advance the relationship.

The Trans-Pacific Partnership [trade] agreement has a strategic significance of stabilizing the region. We will have a dialogue with Mr. Trump to prevent the world from turning protectionist.

Q: What would be the impact to regional security in Asia?

A: I don't expect any drastic change. During the election, I spoke with Mr. Michael Flynn, who will be the national security adviser to the president. He indicated that the Japan-U.S. alliance is the most important, and that security in Asia won't change much under a Trump administration.

Q: Trump spoke earlier about making Japan pay more for the U.S. military operations in this country.

A: Japan is paying its fair share. When we explain the arrangement with the significance of Japan-U.S. relations in mind, he may understand.

Q: In domestic politics, the timing of a lower-house dissolution for a snap election is drawing much attention.

A: The decision lies solely in [Prime Minister Shinzo Abe's] hands. But the prime minister himself has indicated that we need to properly work on the economy. So the question is: How do we take that in the current context?

The upper-house election [in July] was a test of public trust in the government's economic policy. It is important for us to produce results in each area where we made promises.

Q: Will a delay in dissolution put tough reform efforts on hold?

A: We will advance what's necessary. There is no wavering about that, and I am confident.

Q: So as soon as the economy is on track to recovery, the dissolution could come at any moment?

A: I am not worried as long as we work on each task at hand with a forward-looking attitude.

Q: Would a dissolution near the end of the lower-house term in December 2018 be disadvantageous for the ruling parties?

A: I don't think that would be the case. 

Interviewed by Nikkei staff writer Takashi Tsuji

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