Japan to take ‘appropriate steps’ as yen falls sharply
Tokyo, Japan - Japan will take appropriate action to counter excessive volatility in the currency market without ruling out any options, Finance Minister Shunichi Suzuki said Tuesday, as the yen weakened further and neared the psychologically important 155 line against the US dollar.
Suzuki said the government is monitoring foreign exchange movements with "a high sense of urgency" while maintaining close communication with the monetary authorities of other nations.
Amid caution over direct market intervention by Japanese authorities, the yen has continued to weaken even after the Bank of Japan last month raised interest rates for the first time in 17 years.
The Japanese currency's weakness also comes amid receding expectations that the US Federal Reserve will start cutting interest rates as soon as June following aggressive monetary tightening to fight inflation.
"We are carefully watching market developments based on our firm stance that we will take appropriate action against excessive fluctuations without excluding any options," Suzuki told reporters.
Last week, the finance chiefs of Japan, South Korea and the United States shared "serious concerns" about the sharp depreciation of the yen and won relative to the dollar.
Separately, the Group of Seven or G7 finance ministers and central bank governors reiterated that excessive and disorderly foreign exchange movements negatively affect the economy.
During a parliamentary session, Suzuki stressed the need for close communication with monetary authorities in other countries, signalling the government is laying the ground for another market intervention.