By Makiko Yamazaki
RIO DE JANEIRO (Reuters) – Japanese Finance Minister Shunichi Suzuki and top currency diplomat Masato Kanda refrained from commenting on foreign exchange on Wednesday as the yen rose to its highest level against the dollar in more than two months.
Asked about the yen’s recent sharp rise, Suzuki said he would refrain from commenting, noting it “could have unforeseen effects on the market.”
Kanda, the deputy treasury minister for international affairs, echoed Suzuki’s comment on unforeseen effects when asked whether speculative moves he previously blamed for the yen’s weakness had abated.
The yen rose more than 1% on Wednesday to its highest level since May as investors unwound short yen positions ahead of next week’s Bank of Japan policy review, in which policymakers are expected to discuss a rate hike.
Suzuki and Kanda spoke to reporters in Rio de Janeiro after a meeting of financial leaders of the Group of Seven (G7) countries, which took place on the sidelines of a meeting of G20 financial leaders.
The silence was in stark contrast to their repeated warnings for action against excessive volatility earlier this month, when Tokyo was suspected of spending nearly 6 trillion yen ($39.22 billion) on market interventions to float a currency which languished at a 38-year low below 160 per year. dollars.
Kanda said on Wednesday that foreign exchange was not on the G7 agenda.
“But we as G7 discuss this topic routinely,” he said.
Sources familiar with the matter have said Japan will seek a reaffirmation at the G20 meeting of previously agreed commitments that exchange rates reflect underlying economic fundamentals.
Some politicians have called on the Bank of Japan to provide more clarity on its rate hike plan, in part to prevent the yen from testing new lows against the dollar, adding to pressure on the central bank.
While a weak yen boosts exports, it has become a concern for policymakers by raising import costs and hurting consumption.
Kanda told reporters that Wednesday’s G7 meeting raised the issues of China’s growing excess industrial capacity, but declined to comment further.
He also said G7 financial leaders have made “significant progress” in talks on tapping revenue from frozen Russian government bonds to support a $50 billion loan to Ukraine, without elaborating.
($1 = 152.9700 yen)
