Intellasia East Asia News – Japan’s Kanda ‘Will Respond Appropriately’ to Yen Movements

Japan’s top foreign exchange diplomat Masato Kanda warned of the yen’s significant weakening overnight on US inflation data, saying he was “concerned” about currency movements.

“We are watching the movements of the yen with a sense of urgency,” Kanda, Japan’s vice finance minister for international affairs, told reporters.

“We will respond appropriately to currency movements without ruling out any options.”

The dollar surged against the yen as well as the euro and other currencies on Tuesday after stronger-than-expected US inflation data suggested the Federal Reserve may need to remain aggressive in raising interest rates. interest.

The dollar last traded around 144.44.

The yen has lost around 20% of its value against the dollar since the start of this year.

The Japanese currency hit a new 24-year low just below 145 yen last week, fueling concerns over rising costs of living, prompting policymakers to oppose the yen selloff.

However, many market participants say that Japanese policymakers have few effective tools to correct the weakness of the yen, which is seen to be caused by the divergent monetary policy between Japan and the United States.

While the US Federal Reserve is raising interest rates to fight inflation, the Bank of Japan is sticking to strong monetary easing to support a fragile economy.

Category: Japan

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