The Japanese government will "closely watch" how the depreciation of currencies in emerging countries, including the Argentine peso, will affect the global economy and financial market, Finance Minister Taro Aso said Tuesday.
Aso, however, took a cautiously optimistic view of the outlook for the currencies, saying many emerging economies are resistant to a sharp decline in their currencies as their holdings of foreign exchange reserves have been increasing.
Emerging nations "have stronger power to withstand (currency) shocks" than from the late 1990s to the early 2000s, when many of the countries faced financial crises, Aso said at a press conference.
In general, a nation that holds a certain amount of foreign exchange reserves is believed to be able to prop up its currency through market intervention to buy it and sell the reserves.
Emerging currencies have come under downward pressure due partly to lingering concern that the "tapering" of the U.S. Federal Reserve's large-scale monetary stimulus could result in an outflow of capital from emerging economies.
Fears about the future course of the currency market have recently triggered a selloff of stocks across the globe.