By Makiko Yamazaki
TOKYO (Reuters) – Top Japanese finance officials said on Friday the government is “alarmed” by recent currency moves and ready to intervene if speculative moves are deemed excessive as the yen resumes its rapid decline.
Against the Japanese yen, the dollar rose to a high of 157.93 on Friday, its highest level since July, after the Bank of Japan kept interest rates unchanged on Thursday and the governor gave little guidance on how quickly borrowing costs might rise.
“We have seen one-sided and sharp moves recently,” Finance Minister Katsunobu Kato told a regular news conference on Friday.
“As we are alarmed by the recent developments in the foreign exchange market, including those driven by speculators, we will take appropriate action against excessive movements,” he said.
It is rare for Japanese policymakers to explicitly describe the situation in the currency market as alarming, signaling the government’s increased concerns about the falling yen.
Later in the day, Japan’s top currency diplomat Atsushi Mimura also reiterated the government’s position. He said he is alarmed by currency movements and is ready to take appropriate action.
The BOJ’s interest rate meeting on Thursday ended hours after the US Federal Reserve cut rates, but indicated a more cautious path of easing next year, suggesting US-Japan interest rate spreads may not narrow as quickly as previously was expected.
Asked about the interest rate differentials between the US and Japan and the BOJ’s communication style, Mimura, Deputy Treasury Secretary for International Affairs, declined to comment.
Japan last carried out a yen-buying intervention in July to support its currency after it fell to a 38-year low below 161 per dollar.
Kato also said at the press conference that the financial leaders of the Group of Seven (G7) countries held an online meeting last night under the Italian presidency to discuss support for Ukraine and the impact of artificial intelligence on the global economy.
Kato said he and BOJ Governor Kazuo Ueda had joined the call.
