Masato Kanda, Japan’s Finance Ministry’s deputy finance minister for international affairs, at a press conference after the Group of 20 (G-20) finance ministers and central bank governors meeting.
Bloomberg | Bloomberg | Getty Images
Japan’s top monetary diplomat warned speculators trying to sell the yen on Monday that the yen’s weakness did not reflect fundamentals, the latest warning that the yen has “slumped sharply” against the dollar.
Masato Kanda, Japan’s Vice Minister for International Affairs at the Ministry of Finance, made the above comments at an impromptu press conference: Japanese currency It is hovering near a 32-year low of around 152 against the US dollar.
“In terms of currencies, the U.S. dollar-yen exchange rate has experienced a sharp swing of 4% in the past two weeks alone,” Kanda told reporters.
“It doesn’t reflect fundamentals, which I find a little strange.”
Kanda described recent yen moves as “speculative.” He said he would not rule out taking any measures but was ready to respond appropriately to currency movements.
He added that even as he traveled abroad over the weekend, he had been watching currency movements closely with a sense of urgency.
A weaker yen could lead to higher living costs due to higher prices for imported products.
Analysts said the fact that the government tolerated the yen falling below 150 yen to the dollar compared with 2022 when the yen entered the market exceeded 145 yen against the dollar showed that officials may lack a sense of crisis for a weak currency.
“Kanda issued a warning today to those trying to sell the yen. However, even if the dollar hits 155 yen, there may not be an intervention,” said Masafumi Yamamoto, chief currency strategist at Mizuho Securities.
The weak yen has not become a political issue for Japan and its trading partners, and has brought windfalls such as a boon to inbound tourism and record stock market prices driven by a weak yen.
Indeed, Kanda noted that a weak yen has its pros and cons depending on the economic players, adding that he did not have a specific exchange rate level in mind when asked about the line of defense.
Japan last intervened in currency markets in October 2022, buying large amounts of yen and selling dollars.
The yen was trading around 151.27 to the dollar on Monday morning.
About The Author
