Continued appreciation of the yen has finally touched the Japanese Government and the Bank of Japan’s nerves. However, the market had expected, Japanese Prime Minister Kan Naoto line with the Bank of Japan Shirakawa Fang Ming in 23 talks, the talks eventually became a conference call, both sides have not introduced any substantive measures. Affected by this, yesterday the Japanese stock market closed at new lows, the dollar fell against the yen once again the key 85 level.

No substantive results conference call

According to Japanese media reports, the Bank of Japan spokesman yesterday said that the trekking Shirakawa Fang Ming and Prime Minister Naoto Kan yen a telephone meeting to discuss possible economic impact of the two sides will maintain close communication.

Japanese Finance Minister wild Tianjia Yan then said Naoto Kan asked the Government to maintain close attention to the financial markets, but the two did not discuss the response and the new economic stimulus package and so on. BNP Paribas’s analysts said the Japanese government and the lack of communication between the central bank, that the two sides Zai handling economic slowdown and the yen strength of Wen Ti Shang unlikely to agree and the Government of Japan in addition to Fabiao comments Shitu down the yen Wai, not Keneng to take any practical measures, the yen will continue to be strong.

Or expansion of new economic stimulus plan

In the context of the yen continues to appreciate, many Japanese companies are deeply uneasy about the economic outlook. Japan’s Kyodo news summary of the 107 most recent major business sentiment survey showed that 84 companies worried about Japan’s economy will be worse. Meanwhile, many companies also appreciation of the yen and the weakening effects of the economic stimulus policies that guard against.

Democratic Party of Japan Secretary General Yukio Edano said yesterday that the appreciation of the yen and the view is not optimistic about the employment situation, the Japanese Government to consider a comprehensive new economic stimulus measures to boost the economy. Sources pointed out that the Japanese Ministry of Economy is seeking about 100 billion yen for the Butie small and medium export enterprises to help them remain competitive. It is reported that small and medium export companies hardest hit by the appreciation of the yen, the Japanese Ministry of Economy agreed to protect employment and to help export enterprises will be the top priority of the government’s economic agenda.

Earlier, some analysts expect Japan’s new economic stimulus plan will be baked in September, the Japanese government and central bank by augmenting expenditure and ease monetary policy to reduce the impact of yen appreciation, the total size will reach 1.7 trillion more yen. However, the Democratic Party of Japan President Genba Koichiro tone, said yesterday that the scale of the economic stimulus plan may exceed the current amount, the Japanese government bond financing remains possible.

Yen strength continues

As investors worried about the economic outlook troubled market, the Nikkei 225 index yesterday to open lower. As Naoto Kan and White Fang Ming Chuan telephone talks did not make specific policy, the market was disappointed, further yen gains, the Nikkei index fall to increase. In the end, the Nikkei 225 index fell 0.68% to close at 9116.69 points, marking the lowest level this year.

Market participants also noted that concerns about the economic outlook to hedge funds and foreign investors to speed up the pace of selling, which dragged down Japanese stocks fell. Some analysts said that if the U.S. dollar against the yen exchange rate to hold the 85 mark, the Nikkei 225 index above 9,000 points, will receive support. However, the European trading session yesterday, the yen exchange rate continue to be strong, the dollar fell against the yen once the key 85 level.

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