On June 28th, as the Japanese yen approached its lowest point in 40 years, according to the Nikkei Shimbun, Japan appointed a new exchange rate supervisor.

Who is Atsushi Mimura?

According to the latest news, the Japanese Ministry of Finance has appointed Atsushi Mimura as the new Deputy Minister of Finance for International Affairs, replacing retired Masato Kanda as the official manager of the Japanese yen.

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Atsushi Mimura, the current head of the International Bureau of the Ministry of Finance, is expected to continue his predecessor's policy and advocate for maintaining a stable currency that reflects economic fundamentals. This appointment is a normal personnel rotation and will not affect Japan's overall monetary policy.

However, this role involves subtle communication with the media. The highest ranking official in charge of foreign exchange affairs in Japan and Deputy Minister of Finance, Makoto Kanda, has been in this position for three years, which is longer than usual.

Since taking office in 2021, Shinzo Kanda has been known for his charismatic image as a policy spokesperson, having experienced the pandemic, a historic weakening of the yen, Russia's full-scale invasion of Ukraine, and last year's G7 finance ministers meeting hosted by Japan.

Recently, Shinzo Kanda supervised a record breaking 9.8 trillion yen intervention from late April to early May to support the yen. Earlier this week, the Japanese yen fell to a 38 year low of 160.87 against the US dollar.

The Japanese yen fell below 161

On Friday morning in Tokyo, the Japanese yen continued to decline against the US dollar, falling below the critical 161 level.

Against the backdrop of a strong US dollar, the Japanese yen fell to a 38 year low against the US dollar on Friday, breaking below the 161 mark for the first time since 1986. In Tokyo trading, the currency of this Asian country depreciated by a maximum of 0.3% to 161.28 yen against the US dollar. The last time the yen was at this level was in December 1986. As US presidential candidate Donald Trump and current President Joe Biden debate, the US dollar continues to rise against major currencies.

This quarter, the Japanese yen fell 6% against the US dollar, and has fallen 12% so far this year, marking the largest decline among G10 currencies. The exchange rate of the Japanese yen against the euro was 172.37, reaching a historic low, indicating that the market is testing the Japanese authorities' determination to intervene.

The weakening of the Japanese yen has triggered cost driven inflation pressure through imports, causing widespread concern among corporate executives, officials, and consumers. Since the end of April, Japanese authorities have intervened in the market at least twice, supporting the yen with record amounts of intervention.

"In a low volatility environment, the desire for carry trading continues," Ray Attrill, head of forex strategy at the National Bank of Australia, said in Sydney. "Since the yen (against the US dollar) has broken through 160 without intervention, I believe the fear in the market before 160 has dissipated."

What challenges does Mimura face?

Mimura will face multiple financial challenges in its new role, from global conflicts to debt and economic security. In the early stages of his career, he served at the Financial Services Bureau, the Bank for International Settlements, as well as in the administrative and legal departments, and liaised with parliament.

Tatsuo Yamasaki, former Deputy Finance Minister and current professor at the International University of Health and Welfare, said that Mimura is facing "an extremely weak yen and two ongoing wars between Ukraine and the Middle East."

He also mentioned, "The global economy is facing a turning point in monetary policy in Europe and the United States. In this situation, the Deputy Secretary of Finance will participate in discussions on how to stabilize the global economy."

Yamasaki believes that there will be policy continuity. When making statements about the economy or currency, officials "act as an organization under the guidance of the Minister of Finance."

Yamasaki said, "Personnel changes will not change this. Those with the ability and experience will be appointed as successors to the position."

In addition, according to the Nikkei Shimbun, Hideki Ito will replace Teruhisa Kurita as the Director of the Financial Services Agency of Japan.