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 Japan's Finance Minister Shunichi Suzuki stressed on Friday the need for currency stability and said he was watching market moves "carefully," in the wake of the yen's recent declines against the dollar.

Domestic media and some market participants have warned of the potential demerits of a weak yen, which pushes up import prices and households' cost of living at a time when the economy is recovering from the COVID-19 pandemic.

"I won't comment on the currency market itself, but stability is important above all," Suzuki told reporters.

"From that standpoint, we'll closely watch currency market moves and their impact on the Japanese economy," he said, when asked if the weakening yen was negative for the economy.

Suzuki's remarks came as the dollar hovered near a five-year high at 116.355 yen hit on Tuesday, after strengthening on expectations that the U.S. Federal Reserve will embark on steady interest rate hikes while the Bank of Japan keeps rates ultra-low.

Japanese policymakers have traditionally favoured a weak yen as it gives exporters a competitive advantage.

But BOJ Governor Haruhiko Kuroda said last month the boost to export volume from a weak yen may have declined compared with the past as more Japanese companies have shifted production abroad.

Kuroda also said the hit to households from a weak yen may have become bigger due to Japan's increasing reliance on raw material imports, offering the most direct acknowledgement yet of the potential disadvantages of a weaker yen. read more

With wholesale inflation already hitting a record high and driving up the cost of living, further yen declines could become politically painful for Prime Minister Fumio Kishida ahead of an upper house election looming in the summer.

Data released on Friday showed household spending fell for the fourth straight month and inflation-adjusted real wages slumped 1.6% in November from a year earlier. read more

J.P. Morgan analysts say the yen's real effective rate, which tumbled to its lowest level in 50 years, is set to fall further and slash consumers' spending power. read more

But Japanese policymakers see little room to intervene in the currency market to arrest the yen's decline, with some conceding there is good reason for it to soften given Japan's weak economy, waning competitiveness and dire public finances.

"In a way, a weak yen reflects Japan's fundamentals," one ministry said on condition of anonymity, though adding that Tokyo was ready to step in if yen declines become too sharp.

Japan has stayed away from intervening in the currency market since 2011 when devastating earthquakes and the subsequent Fukushima nuclear crisis triggered a spike in the safe-haven yen. (Reuters)

China's foreign minister began a visit to Kenya on Wednesday, where the government has relied on Chinese loans to develop infrastructure but faces criticism over the resulting debt burden.

The Kenyan foreign ministry described the visit by Wang Yi, who is also state councillor, as "historic". It said security, health, climate change and green technology transfer would be discussed and new bilateral agreements would be signed.

Kenya is the second of three stops on Wang's African tour, after Eritrea and before Comoros. Eritrea joined Chinese President Xi Jinping's Belt and Road Initiative (BRI), a long-term plan to fund and build infrastructure linking China to the rest of the world, in November.

China has lent African countries billions of dollars as part of the BRI, including $5 billion for the construction of a modern railway from the Kenyan port of Mombasa. read more

That model has been evolving, partly under the strain of the COVID-19 pandemic and its economic fallout and partly because of a backlash from African critics against rising debt levels. China is shifting from hard infrastructure loans to efforts to boost trade. read more

Among critics of Kenya's reliance on Chinese funding is Kimani Ichung'wah, a ruling party lawmaker who has become a critic of the government.

"It is a debt trap and they should start renegotiating," he told Reuters before Wang's visit, complaining that the interest rates on Chinese loans was exorbitant.

Ichung'wah is backing William Ruto, estranged deputy to President Uhuru Kenyatta, to take over the presidency in an election scheduled for August, and said that if Ruto won his government would seek new terms for the loan repayments.

Eritrea, one of the poorest and most isolated nations in the world, is involved in the conflict in Tigray in northern Ethiopia that has destabilised the Horn of Africa region.

Lina Benabdallah, an expert on China-Africa relations at Wake Forest University in the United States, said Wang's visit signalled Beijing's interest in restoring stability to the Horn and in improving access to Africa via Eritrea's Red Sea ports.

Peter Kagwanja, a professor of international relations at the University of Nairobi, said the Comoros stop was also likely linked to trade interests. The Indian Ocean archipelago sits on the rim of a maritime trade route known in China as the Maritime Silk Road and considered strategically important by Beijing, he said. (Reuters)

 Russia sent paratroopers into Kazakhstan on Thursday to quell a countrywide uprising after deadly violence spread across the tightly controlled former Soviet state.

Police said they had killed dozens of rioters in the main city Almaty. State television said 13 members of the security forces had died, including two who had been decapitated.

Reuters journalists in Almaty said a presidential residence and the mayor's office were both ablaze. By Thursday afternoon, the city's airport, seized earlier by protesters, was under the firm control of military personnel. Burnt out cars littered the streets.

Several armoured personnel carriers and scores of troops had entered the main square of Almaty on Thursday morning, and gunshots could be heard as troops approached the crowd, Reuters correspondents reported from the scene.

Later on Thursday, the square appeared peaceful, with 200-300 protesters still gathered and no troops around.

Internet had been shut down across the country and the full extent of the violence was impossible to confirm. But the unrest was unprecedented for Kazakhstan, ruled firmly since Soviet times by leader Nursultan Nazarbayev, 81, who had held on to the reins despite stepping down three years ago as president.

"ATTACK ON OUR CITIZENS"

Nazarbayev's hand-picked successor, President Kassym-Jomart Tokayev, called in forces from ally Russia overnight as part of a Moscow-led military alliance of ex-Soviet states. He blamed the unrest on foreign-trained terrorists who he said had seized buildings and weapons.

"It is an undermining of the integrity of the state and most importantly it is an attack on our citizens who are asking me... to help them urgently," he said.

The secretariat of the Russian-led Collective Security Treaty Organisation said troops being sent included units from Russia, Belarus, Armenia, Tajikistan and Kyrgyzstan. It did not disclose the overall size of the force.

Russian paratroopers were being transferred to Kazakhstan and "the advanced units of its contingent have already begun to fulfil their assigned tasks". 

Unverified video on social media showed troops patrolling Almaty's foggy streets overnight, firing weapons, as well as widespread looting in the city.

The uprising, which began as protests against a New Year's Day fuel price hike, had swelled dramatically on Wednesday, when the protesters stormed and torched public buildings. They chanted slogans against Nazarbayev, and in at least one case looped ropes around a bronze statue of him, trying to pull it down.

Tokayev initially responded by dismissing his cabinet, reversing the fuel price rise and distancing himself from his predecessor. He also announced he was taking over a powerful security post Nazarbayev had retained.

But the actions appeared insufficient to mollify crowds who accuse the authorities of amassing huge wealth in oil and minerals while the nation of 19 million remained mostly poor.

Nazarbayev stepped down in 2019 as the last Soviet-era Communist Party boss still ruling a former Soviet state. But he and his family retained control, keeping key posts overseeing security forces and the political apparatus in Nur-Sultan, the purpose-built capital bearing his name. He has not been seen or heard from since the unrest began.

Tokayev described the protesters as terrorists with foreign training, although he provided no evidence. State television on Thursday showed unconfirmed video of a pile of weapons on the street, with people walking up and taking them.

TASS news agency quoted the Kazakh health ministry as saying more than 1,000 people had been injured during the protests, and more than 400 of them were in hospital.

Western countries have called for calm. Neighbour China described the events as an internal matter for Kazakhstan and said it hoped the situation would stabilise soon.

The unrest began as protests against the rising price of liquefied petroleum gas, a fuel used by the poor to power their cars. But it quickly spread into broader anti-government riots, feeding off deep-seated resentment over three decades of rule by Nazarbayev and his successor.

Tokayev ordered government protection for foreign embassies and businesses owned by foreign companies. The country's reputation for stability had helped attract hundreds of billions of dollars of foreign investment in oil and metals industries.

State TV said the National Bank of Kazakhstan had decided to suspend work of banks for the safety of their workers. (Reuters)

Japan and Australia signed an agreement on Thursday to cooperate closely on defence in the latest step to bolster security ties against the backdrop of China's rising military and economic might.

Japanese Prime Minister Fumio Kishida and Australian Prime Minister Scott Morrison held a virtual summit to seal a pact that has been in the works for several years.

Australia has been working with Japan, India, the United States and Britain to strengthen defence ties amid concerns about China, including its pressure on Taiwan, freedom of navigation in the region and trade disputes.

The Reciprocal Access Agreement (RAA), Japan's first with any country, will allow the Australian and Japanese militaries to work seamlessly with each other on defence and humanitarian operations, Morrison said.

"Japan is our closest partner in Asia as demonstrated by our special strategic partnership, Australia's only such partnership - an equal partnership of shared trust between two great democracies committed to the rule of law, human rights, free trade and a free and open Indo-Pacific," Morrison said at a signing ceremony.

Japan's only other military pact is with the United States, a status of forces agreement dating back to 1960 that allows the United States to base warships, fighter jets and thousands of troops in and around Japan as part of an alliance that the United States describes as the bedrock of regional security.

"The RAA is a landmark treaty which opens a new chapter for advanced defence and security co-operation of what is a complex and rapidly changing world, something you and I both understand very well," Morrison told Kishida.

Morrison said ahead of the meeting that stronger ties with Japan were needed "to deal with a new and even more challenging environment, particularly within the Indo-Pacific".

Kishida had been due to travel to Australia on Thursday but scrapped the trip to tackle a surge in COVID-19 cases in Japan. (Reuters)