Sunday, August 23, 2015

1973 - MOF VIEWS ON MONETARY REFORM

SUMMARY: FOLLOWING ARE VICE MINISTER INAMURA'S VIEWS ON MONETARY REFORM. THESE INDICATE DESIRE IS FOR ONLY SMALL MODIFICATION FROM PRESENT SYSTEM. EMPHASIS IS ON STABLE EXCHANGE RATES, TO BE CHANGED ONLY IN CASE OF FUNDAMENTAL DISEQUILIBRIUM. ELASTICITY FOR SYSTEM SHOULD CONTINUE TO BE THROUGH PROVISION OF CREDIT. AS CREDITOR COUNTRY JAPAN NOW IN FAVOR OF MANDATORY SETTLEMENT IN STRONG INTERNATIONAL ASSETS.

"...
6. IF THESE TECHNIQUES CAN BE EXPANDED SO THAT JAPAN CAN CONFIDENTLY GENERATE OUTFLOW OF YEN DENOMINATED LONG TERM CAPITAL TO FINANCE CURRENT ACCOUNT SURPLUS THEN PRESENT FL.."OAT SYSTEM MAY BECOME MORE ATTRACTIVE TO GOJ. THIS ESPECIALLY TRUE IN CONJUNCTION WITH FLEXIBLE USE OF CAPITAL CONTROLS WHEREBY FOREX SUPPLIES AND DEMAND CAN BE REGULATED UNILATERALLY TO INFLUENCE YEN/DOLLAR RATE. SUCH A SYSTEM, WHICH RESEMBLES PRESENT FLOAT, IF IT COULD BE CONTINUED, MIGHT OFFER JAPAN BETTER ALTERNATIVE THAN OPERATING UNDER REFORMED IMF RULES..."

Source: https://search.wikileaks.org/plusd/cables/1973TOKYO08319_b.html

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