Intellasia East Asia News – Japan signals readiness to act on FX market if high yen volatility persists

Japanese Finance Minister Shunichi Suzuki said on Friday that he would not rule out any possibility of action in the foreign exchange market if the sharp decline in the yen persists.

Suzuki told ministry reporters he was concerned about the recent rapid, one-sided weakening of the yen, which hit a 24-year low against the dollar earlier this month.

His comments reiterated similar rhetoric from Japanese authorities earlier this month.

Earlier on Wednesday, the Bank of Japan carried out a rate check on banks seemingly ready to step in to rein in the yen’s sharp falls.

“If such measures persist, the authorities will take the necessary measures without ruling out any options,” Suzuki said.

“It is important that currencies move in a stable manner, reflecting economic fundamentals. Sudden movements are not desirable.

Suzuki said a weak yen has both pros and cons, and he couldn’t call it good or bad.

The dollar was down 0.37% against the Japanese yen at 142.96, helped a little by speculation of possible monetary intervention by the Japanese authorities.

Market attention is focused on a series of monetary policy meetings from the Federal Reserve, Bank of Japan and Bank of England next week.

The divergence in monetary policy between Japan and other developed countries could further weaken the yen, with the Fed raising interest rates and the BOJ maintaining its massive stimulus package.

Officials would do everything possible to maximize the benefits of the weak yen in areas such as inbound tourism to attract travelers to Japan to boost the economy, Suzuki said.

The government also aims to craft an economic package with targeted spending to help those affected by the impact of the weak yen on the rising cost of living, he said.

Category: Japan

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