FedThe Japanese Finance Minister Taro Aso, on weekend press headlines out of Tokyo, said the objectives from the current government are not intended to weaken the yen, but rather implement policy actions that can help to overcome a chronic two-decades deflation problem.

He added that the massive fall in the Yen value was the result of ongoing policies, but not the goal of it. The comments challenge growing concerns that Tokyo is trying to deliberately weaken the Japanese Yen in order to gain competitiveness against other industrialized countries, especially after the trade balance deficits the country has fell into in the past year.

Reporting on the latest comments from Japan's Finance minister, Antoni Slodkowski from Reuters, cites the politician: "We have launched policies aimed at ending deflation. As a result, the stock price has risen and the yen has weakened," Aso told Japanese public broadcaster NHK on Sunday. "(The yen weakness) is not the goal, the goal is to beat deflation," he said.

Next governor at the Bank of Japan should defend its independence, DPJ says

Amid talk that Japan's Prime Minister intends to revise the law, so that the government can play a greater role on economic monetary polices, an executive of the largest opposition party, said yesterday that the next governor at the Bank of Japan must be someone who can defend its independence, Bloomberg reports.

The comments remind the market that Prime Minister Shinzo Abe will have to face fierce opposition in his candidate for the post through the Diet. “The BOJ’s independence must be guaranteed,” Mitsuru Sakurai, policy chief for the Democratic Party of Japan, said in an interview yesterday, cited by Bloomberg. “We need someone who can do that.”

Abe's ideal nominee for the post should have as top priority the implementation of 'bold' monetary policies to ensure that Japan can beat deflation after more than 2 decades suffering depressed prices. However, since Abe's Liberal Democratic Party doesn't enjoy a majority on the Diet' upper house, he badly needs to reach a compromise with the opposition.

Potential candidates listed by Bloomberg include "former economy minister Heizo Takenaka, Asian Development Bank President Haruhiko Kuroda and former deputy BOJ governor Kazumasa Iwata." 

BoJ chief candidate Takenaka suggests further room to weaken the Yen

The Yen still has room to depreciate further, with 95 in USD/JPY seen by many as an ideal rate, Heizo Takenaka, key economic advisor to Japanese Prime Minister Shinzo Abe, and one possible candidate to become the next head of the BoJ in April, told The Wall Street Journal on Saturday

"The yen's recent fall was a result of a correction from an excessive strength, and that the BOJ's latest easing measures were aimed at beating deflation, not a weaker yen" said the WSJ, citing Mr. Takenaka.

"This correction has just started, it's not fair to say the yen has depreciated too much" the advisor said, being cited by the WSJ.

"There's not a very scientific way of thinking about where the yen will end, but lots of people think a range around 95 to the dollar is appropriate at the moment," said Mr. Takenaka.

Takenaka failed to discard more aggressive polices, saying that buying foreign bonds instead of local JGB purchases may be an option to consider, should the latter prove inadequate.

More quotes from the WSJ: "My view is first we should try purchasing Japanese government bonds from the market, I think that will have a positive impact. But if that is not enough, to achieve the target, other things like purchasing foreign bonds could be considered."

BoJ 2% inflation plans to produce positive results in 6-12 months - Hamada

In an Kyodo article over the weekend, Koichi Hamada, close economic adviser to Japanese Prime Minister Shinzo Abe, has stated that, if the BoJ continues to expand its powerful easing policies, the 2% inflation goal should start to produce positive results in the next 6 t 12 months. 

Furthermore, following Abe's posture to revise the BOJ law in order for the government to play a greater role on setting monetary goals, Hamada appeared kind to the idea. The economic adviser aims at limiting the central bank's power to fiscal policies.

From the Japanese Times: “If it continues to implement policies that do not disappoint the public’s expectations, it will yield some results in six months to a year,” said Hamada, adding it is not very difficult for the BOJ to achieve the target.

Japan's Aso stresses importance of free-floating currencies

One more day, one more bunch of headlines out of Japan, this time from Japanese Finance Minister Mr. Aso, who said "it is important to let currencies move freely", adding "Japan at phase in correcting excessively strong Yen." 

The comments follow Thursday's Yen weakness catalyst, when the country’s deputy economy minister, said a rate of 100 in USDJPY would not be a problem at all, clearly softening the rhetoric, so that speculators can continue driving the Yen to new cycle lows.

Japan's Abe aims for ultra-aggressive BoJ thru law revision - Kyodo

Japanese Prime Minister Shinzo Abe continues to inspire the sell of Yens, with the latest comments a clear sign of his obsession for a sustained shift in how the BoJ conducts monetary policies. In the last 24h ago, the Prime Ministers has, once again, provided a more aggressive rhetoric on the course Japan's monetary regime has to pursue. 

Not having enough reassurance with the recent 2% inflation mandate by the BoJ, Mr. Abe said Thursday, that the government will continue to pursue a potential change in the law, by which he can guarantee ultra-bold easing monetary policy. The PM was quoted in an interview with Kyodo news, saying that "given the need for continued bold monetary easing, I want to keep in mind a the potential legal revision."