Japan to Take Steps Against Excessive Yen Moves, Says Finance Minister
Japan’s Finance Minister Shunichi Suzuki stated on Wednesday that Japan will take appropriate measures to address excessive moves in the yen, without ruling out any options. This announcement has put the markets on alert for the possibility of yen-buying intervention.
Suzuki declined to comment on whether Tokyo intervened in the exchange rate market overnight to support the yen. He emphasized the importance of stable currency rates driven by market forces and stated that sharp movements are undesirable.
The government is closely monitoring market developments and is prepared to take necessary action to counter excessive volatility. Masato Kanda, Japan’s top currency diplomat, also mentioned that they are considering various factors, including implied volatility, to determine if yen moves are excessive.
After the yen fell below the psychologically significant 150 per dollar level, it experienced a sharp strengthening overnight on Tuesday, leading some market participants to speculate about intervention by Tokyo. As of Wednesday, the dollar was trading at 149.200 yen in Asia.
Japanese authorities are facing renewed pressure to combat the prolonged depreciation of the yen, as investors anticipate higher U.S. interest rates while the Bank of Japan maintains its super-low interest rate policy.
Tokyo last intervened in the foreign exchange market in September and October of last year when the yen eventually reached a 32-year low of 151.94 per dollar. Kanda expressed confidence that Tokyo can garner support from the United States and other Group of Seven partners for intervention.
Kanda also had a meeting with Prime Minister Fumio Kishida to discuss the economy in general. The Japanese government aims to maintain understanding and cooperation with other countries regarding its actions in the currency market.
Reporting by Tetsushi Kajimoto and Leika Kihara; Additional reporting by Kentaro Sugiyama; Editing by Chang-Ran Kim, Muralikumar Anantharaman, and Edmund Klamann