Japan doesn't plan to intervene further in foreign exchange markets to boost the value of the yen against the dollar, but won't interfere if normal market forces push the yen higher, according to Japanese Finance Minister Noboru Takeshita.
"If, through market forces, the yen is 200 to the dollar, or 190 to the dollar, if it's realized by market forces, it's all right," Takeshita said in an interview Tuesday. But he reiterated that the government has "no target at a precise level. I always say when asked about this that 'only God knows, no one else knows' what the value of the yen should be."
Takeshita's statement tended to confirm earlier signals by Bank of Japan officials that the government feels the yen has risen enough in international markets.
Japan, along with the United States and other industrial nations, had intervened in foreign exchange markets on a coordinated basis following a meeting of the Group of Five industrialized nations -- the United States, Japan, West Germany, France and Britain -- in New York on Sept. 22.
Since then, the yen has appreciated about 12 percent, from about 220 to the dollar to just under 200, and recently has stabilized at just over 200 to the dollar. At that level, the yen is up about 23 percent from its low of about 260 to the dollar in early 1985.
As a result of the higher-priced yen, some Japanese exporters have increased the dollar prices of goods to be shipped here. Eventually, the higher price tags on Japanese goods may reduce the huge Japanese trade surplus, Takeshita said.
The finance minister, who is prominently mentioned as a possible successor to Prime Minister Yasuhiro Nakasone next year, said the Group of Five ministers agreed at their meeting last weekend that they were satisfied with the shifts in exchange rates to date, but there was no commitment to try to move the dollar still lower. On a trade-weighted basis, the dollar has depreciated about 10 percent against other major currencies, including the West German mark.
Takeshita said the understanding among the G-5 ministers in London was to avoid a reversal of the dollar decline that had taken place since September.
Takeshita was in Washington for a brief visit with Treasury Secretary James A. Baker III following their weekend talks at the G-5 meeting.
Takeshita said that Japan is fully in accord with the G-5's statement that the global economic environment made a further reduction in interest rates possible.
He said that, contrary to some reports, Japan had not pressed for a concerted, or joint, effort to create lower interest rates. But he acknowledged that Nakasone had spoken in favor of such an effort.
"As a finance minister, I do not think I can force interest-rate reductions on central bankers," Takeshita said. He added that his attitude offered a slight contrast with that of politicians, including his own prime minister, who he said are more willing "to put pressure" on central bankers.
Japanese sources also indicated that Federal Reserve Chairman Paul A. Volcker is not anxious to see U.S. interest rates move down much more, fearing that such a trend would accelerate the decline of the dollar, possibly posing a new inflationary threat.
Takeshita acknowledged, as a senior U.S. Treasury official had indicated after the G-5 meeting, that the United States is putting additional pressure on Japan to expand its domestic economy.
But he said the other members of the G-5 -- not just the United States -- had pressured Japan and West Germany to work for greater expansion of their domestic output.
In the case of Japan, he said that his fellow finance ministers had urged him to do everything possible to meet the announced economic growth target of 4 percent in the fiscal year beginning April 1. The consensus among private research groups in Japan is that Japanese growth would fall short of that target, he acknowledged.