It is always a little awkward when a Japanese finance minister moans about the level of the currency, just as exporters post unexpectedly vigorous trade data. Jun Azumi was at it again on Monday, arguing that a strong yen was brutalizing the export sector in general, and cars in particular.
The warning came as MoF announced that the value of September's shipments rose 2.4 per cent from a year earlier, led by motor vehicles (+5 per cent) and auto parts (+12 per cent).
Then again, the standard MoF line that a low dollar/yen rate is economically disastrous for Japan has never been well supported by evidence. The briefest of examinations of corporate profits over the past few years, or the country's trade balance, suggests a much stronger correlation with external demand than with the exchange rate.
The effect of a strong currency on domestic risk appetites is not obvious either. The Bank of Japan's latest survey of senior loan officers, published on Monday, showed rising demand for loans among both corporates and individuals, even as the yen edged towards last week's record high of ¥75.82 to the dollar.
Yet even if the argument is dubious, it could be helpful to make it, if it signals that MoF is ready to try to steer the yen closer to manufacturers' assumptions of ¥81.15 for the current fiscal year.
As Barclays Capital notes, the third supplementary budget approved last week raised the government's annual ceiling for issuing short-term financing bills -- its yen-selling "war chest" -- to about ¥38,500-billion ($503-billion), almost nine times the amount MoF sold during its last intervention in early August. The dollar/yen rate, after all, has been unusually steady since then. Identifying the damage done by a strong yen may be difficult, but it is not so hard to see that investors have grown wary of betting against it.