By Makiko Yamazaki
RIO DE JANEIRO (Reuters) -Japan has urged its G20 counterparts to be increasingly vigilant against excessive exchange rate movements due to speculation, Tokyo’s top currency diplomat Masato Kanda said on Thursday.
Speaking at a press conference at the meeting of G20 finance ministers and central bank governors in Rio de Janeiro, Kanda said attention should be paid to the risks of prolonged high interest rates in some countries destabilizing financial markets.
“Japan has said that we must be increasingly vigilant against spillovers (from such risks) and excessive exchange rate movements due to speculation,” said Kanda, Deputy Finance Minister for International Affairs.
“And we must respond appropriately based on the G20 commitments that excessive currency volatility and disorderly movements have a negative impact on the economy and financial stability,” he said.
The comments follow recent wild swings in the Japanese yen.
The currency rose for a fourth session against the dollar on Thursday, recovering from a 38-year low earlier this month, as investors unwound long-term bets against the currency ahead of a Bank of Japan meeting next week.
Analysts had blamed wide interest rate differentials between the US and Japan for the yen’s weakness.
The final draft of the G20 joint statement, seen by Reuters, confirms their exchange rate commitments for April 2021.
The 2021 statement said G20 countries “remain committed to ensuring that our exchange rates reflect underlying economic fundamentals.”
Kanda, who led massive bouts of yen-buying intervention in 2022 and 2024, sees his term end next week as Deputy Finance Minister for International Affairs – a position that oversees Japan’s currency policy and coordinates economic policy with other countries.
He will be succeeded by Atsushi Mimura, a veteran of financial regulation.
