© Reuters. FILE PHOTO: Examples of Japanese yen banknotes are displayed at a National Printing Bureau factory that produces Bank of Japan banknotes at a media event on a new series of banknotes scheduled to be introduced in 2024, in Tokyo, Japan, on November 21, 2022.
By Tetsushi Kajimoto
TOKYO (Reuters) – Japan's top currency officials warned on Wednesday against what they described as rapid and speculative moves in the yen overnight as the Japanese currency surpassed 150 yen, undermining the trade-dependent economy.
The dollar rose to three-month highs late Tuesday after data showed U.S. inflation rose more than expected in January, bolstering expectations that the Federal Reserve will keep interest rates steady in March.
“We are watching the market even more closely,” Finance Minister Shunichi Suzuki told reporters. “Quick measures are not desirable for the economy.”
When asked if the authorities could intervene in the currency market, Suzuki left his office at the Ministry of Finance without saying a word.
Earlier, Japan's top monetary diplomat, Masato Kanda, said the nation would take appropriate measures on currency matters if necessary.
“The recent currency movements are rapid. The yen has weakened almost 10 yen in about a month; such rapid movement is not good for the economy,” Kanda, deputy finance minister for international affairs, told reporters in his office.
Asked whether appropriate measures could include intervening in the market to curb the yen's weakness, Kanda said authorities would take the most appropriate measures.
“We are always watching the market 24 hours a day, 365 days a year to prepare for anything that may happen, just like natural disasters.”
Market players have been mulling over the future pace of Fed rate cuts while speculating on when the Bank of Japan will abandon the negative interest rate policy.
Japan intervened in the currency market three times in 2022, when the yen plunged to a 32-year low near 152 yen per dollar, carrying out a rare intervention of selling dollars and buying yen.
The authorities have not intervened in the market since then. Kanda shrugged off speculation that Japan has capped the sand at around 150 yen.
“We don't target specific currency levels, but we do take into account several factors, such as the speed of the moves and their departure from fundamentals.”
