President Joe Biden said Saturday he is "not concerned" about the strength of the U.S. dollar, in remarks that could further weaken the yen after its plunge to a 32-year low on the back of monetary policy divergence between the United States and Japan.
"I'm not concerned about the strength of the dollar. I'm concerned about the rest of the world," Biden told reporters in the western state of Oregon when asked about the dollar, which has strengthened to the upper 148 yen level, just below the psychologically important 150 yen line.
"The problem is the lack of economic growth and sound policy in other countries, not so much ours," he added.
From earlier this year, the U.S. Federal Reserve has moved ahead with a series of dramatic rate hikes to tackle decades-high inflation, making the dollar more attractive to investors seeking yield and pushing the value of the currency sharply higher.
A strong dollar helps to hold down U.S. inflation as it lowers the prices of imported goods, but can negatively affect poorer countries in particular by increasing their import costs and the burden of their dollar-denominated debts.
Japan, the world's third largest economy and a resource-poor country, has also been increasingly wary over the sharp depreciation of its currency amid the Bank of Japan's continuing monetary easing.
In September, the yen's slide to near the 146 line prompted authorities to conduct their first yen-buying, dollar-selling intervention since 1998.
But the Japanese currency has continued to face selling pressure, with the latest U.S. inflation data fueling speculation that the Fed will continue to aggressively tighten monetary policy.
On Friday in New York, the Japanese currency briefly sank to 148.86 against the dollar, its lowest level since August 1990, leading Japan's Finance Ministry officials to issue verbal warnings that authorities are ready to take "decisive actions" if excessively volatile movements in the currency market are repeated.
In a meeting Wednesday in Washington, finance chiefs of the Group of Seven industrialized nations, which include the United States, Japan and Britain, acknowledged "increased volatility" in many currencies and the need to keep an eye on the markets.
U.S. Treasury Secretary Janet Yellen told a press conference on Friday following the International Monetary Fund and the World Bank meetings in Washington that the United States is "attentive" to the spillovers of monetary tightening from advanced economies to the rest of the world.
But she also said the appreciation of the dollar relative to many other currencies is "largely reflecting differences" in economic shocks that countries are facing and differences of economic policies.
"So...my position would be that market-determined exchange rates are the best regime for the dollar. That's what we are supportive of," she said, indicating U.S. tolerance of the strengthening dollar.
Related coverage:
BOJ chief stays course on ultralow rate policy despite sharp yen drop
Yen falls to 32-yr low near 149 level vs. U.S. dollar
Japan to act appropriately against excessive yen volatility: minister
