[1/2]Japanese Yen banknotes are seen in this illustration image dated September 22, 2022. Portal/Florence Lo/Illustration
TOKYO, June 26 (Portal) – Japan will not rule out available options to adequately respond to excessive currency moves, its top currency diplomat Masato Kanda said on Monday, heightening his warnings that the yen’s recent weakening was “rapid and one-sided”. . “
The deputy finance minister for international affairs also told reporters that currencies should be stable, reflecting fundamentals after the Japanese yen weakened above 143 yen, a seven-month low against the dollar, and topped 155 yen against the euro on Friday a 15-year low had fallen.
The Japanese currency, often seen as a safe haven, is now coming under renewed selling pressure and threatens to increase import costs, dealing a blow to consumers.
“All options are available to us and we are not ruling out any options,” Kanda said when asked about the authorities’ willingness to intervene in the market. “I will not comment on what to do now.”
Policy divergence between the Bank of Japan (BOJ) and the US Federal Reserve has been thought to push the dollar higher as Japan continues to ease monetary policy while the US Federal Reserve has aggressively tightened monetary policy to contain inflation fight.
Japan last conducted rare yen-buying intervention to stem the weakening in October, when the Japanese currency fell to a 32-year low of nearly 152 yen against the dollar.
When asked about the chances of currency intervention, Kanda told reporters that he would not rule out any options.
“Regardless of direction, it’s generally not good for the economy when exchange rates move excessively and diverge from economic fundamentals,” he said.
“Basic movements are fast and one-sided. So we are watching closely with a strong sense of urgency and will respond appropriately to excessive movement.”
He added that the authorities are focused on the pace of the yen’s movements, not its level.
Investors sold the yen after the BOJ kept interest rates extremely low on June 16 and vowed to maintain its massive stimulus measures, in contrast to other central banks, which tightened monetary policy to combat rising inflation.
writing by Leika Kihara and Tetsushi Kajimoto; Edited by Kim Coghill and Jamie Freed
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