The Topix Index of stocks rose 1.2% yesterday after plunging 6.9 percent on May 23, the biggest decline since the March 2011 earthquake and tsunami. The gauge is up 36% this year. Japan’s economy grew the most in a year last quarter and the yen fell past 100 against the dollar this month, boosting Japanese exporters such as Mazda Motor Corp.
In March, Hamada endorsed a yen level of 98 to 100 per dollar even as he said he was scolded by the government for similar remarks that risked friction with Group of 20 nations.
“A level of 100 may restore the competitive conditions of Japanese industry,” Hamada said in an interview over a continental breakfast with black coffee at a central Tokyo hotel yesterday, before an appearance on Bloomberg TV. “I think it is not out of the question” for the currency to weaken further, he said.
Kuroda on May 26 backed “bullish” views on asset markets and said that the nation could cope with rising interest rates. The central bank chief added that Japan is expected to return to a moderate recovery path around the middle of the year, backed by global demand and a pickup in the global economy.
Gross domestic product in the quarter ended March rose an annualized 3.5%, with private consumption, making up 60% of GDP, contributing 2.3 percentage points to the jump. The nation’s resurgence is still constrained by limited business spending.
While exporters such as Honda Motor Co., Toshiba Corp. and Mitsubishi Electric Corp. have announced plans to increase investment this year, the government aims for a pick-up in spending by a broader range of companies.
A phone call from Abe to Hamada in October last year, seeking advice on monetary policy, led to Hamada contributing to the creation of Abenomics, according to the economist. In December, Abe led his Liberal Democratic Party to victory in a general election by pledging to fire “three arrows” to end stagnation: Monetary stimulus, fiscal spending, and cutting regulation to increase investment and hiring.
As to his evaluation of Kuroda’s first two months in office, Hamada said: “I would avoid giving him full marks because I don’t see everything he does. I would give him about 90%.”