by Makiko Yamazaki and Leika Kihara
TOKYO (Reuters) – Japan will intervene in currency markets if necessary, Vice Finance Minister Masato Kanda said on Friday, as Thursday’s sharp rebound in the yen against the dollar raised questions about possible currency intervention.
“The latest movements in currencies are strange in my view, especially in light of fundamentals, and it would be very worrying if excessive volatility triggered by speculation were to increase the cost of imports and complicate people’s lives,” the deputy minister said.
“Currency interventions should certainly be rare in a floating exchange rate regime, but we will have to respond appropriately to excessive volatility or disorderly movements,” added Masato Kanda, who declined to specify whether Japanese authorities had intervened to support the yen.
Yoshimasa Hayashi, Japan’s chief cabinet secretary, also told reporters on Friday that the government was ready to take necessary measures to support the foreign exchange.
Finance Minister Shunichi Suzuki told a news conference that rapid, one-way moves in foreign exchange markets should be avoided.
The remarks are unusual, as Japanese officials have so far remained silent on the relevance of currency intervention.
Data released by the Bank of Japan on Friday also suggested that as much as 3.57 trillion yen (20.6 billion euros) may have been spent to support the Japanese currency on Thursday, while the Nikkei reported that the institution discussed with banks the level of the euro and the yen, a first step before a possible intervention.
The yen jumped nearly 3 percent after weaker-than-expected U.S. inflation data. The dollar rebounded on Friday, with the yen down 0.26 percent at 159.21 yen per dollar by 1020 GMT.
If the government did intervene on Thursday, the move could have been to accelerate the yen’s rebound against the dollar, triggered by indicators of US price dynamics.
“It is not possible to change the direction of the market with intervention. It is the fundamentals that matter, for the most part,” said Tsuyoshi Ueno, an economist at the NLI research institute.
(Reporting by Makiko Yamazaki, with Mariko Katsumura and Yoshifumi Takemoto, written by Leika Kihara, by Corentin Chappron, edited by)
Copyright © 2024 Thomson Reuters
I have over 8 years of experience working in the news industry. I have worked as a reporter, editor, and now managing editor at 247 News Agency. I am responsible for the day-to-day operations of the news website and overseeing all of the content that is published. I also write a column for the website, covering mostly market news.
