Honolulu Star-Advertiser

Thursday, July 18, 2024 85° Today's Paper


Top News

Japan issues fresh warning against yen bears as currency slides

REUTERS/CARLA CARNIEL/FILE PHOTO
                                Japan’s Vice Finance Minister for International Affairs Masato Kanda speaks during a press conference after attending the G20 Finance Ministers and Central Bank Governors meeting in Sao Paulo, Brazil, on Feb. 29. Japanese authorities are ready to take action against speculative and excessively volatile moves in the currency market that hurt the economy, the country’s top currency diplomat Masato Kanda said on Friday.
1/1
Swipe or click to see more

REUTERS/CARLA CARNIEL/FILE PHOTO

Japan’s Vice Finance Minister for International Affairs Masato Kanda speaks during a press conference after attending the G20 Finance Ministers and Central Bank Governors meeting in Sao Paulo, Brazil, on Feb. 29. Japanese authorities are ready to take action against speculative and excessively volatile moves in the currency market that hurt the economy, the country’s top currency diplomat Masato Kanda said on Friday.

TOKYO >> Japanese authorities are ready to take action against speculative and excessively volatile moves in the currency market that hurt the economy, the country’s top currency diplomat Masato Kanda said on Friday.

“It’s not intended to change the market’s trend,” instead it was aimed at smoothing excessive volatility in the currency market, Kanda told reporters when asked about exchange-rate intervention.

“As long as currency rates move stably in line with fundamentals, there’s no need to intervene. By contrast, if there is speculative, excessive volatility in the market, we will take resolute action,” said Kanda, who is vice finance minister for international affairs.

The remarks failed to keep the yen from falling below 159 to the dollar for the first time since April 29, as markets continued to focus on the wide interest-rate divergence between Japan and the United States. The dollar stood at 159.12 yen in Asia on Friday.

Chief Cabinet Secretary Yoshimasa Hayashi also warned yen bears against pushing down the currency, saying authorities would continue to monitor moves in the exchange-rate market.

“It’s important that exchange rates move in a way that reflects fundamentals,” he told a news conference.

Japan spent 9.8 trillion yen ($61.6 billion) intervening in the foreign exchange market in April and May, after the Japanese currency hit a 34-year low of 160.245 per dollar on April 29.

While the moves have kept the yen from testing fresh lows, they have failed to reverse the currency’s downtrend that is hurting households by pushing up fuel and food import costs.

As markets keep an eye on the chance of renewed intervention, a U.S. Treasury report issued on Thursday added Japan to its foreign exchange monitoring list alongside six countries that were on the previous list.

Finance Minister Shunichi Suzuki said on Friday he did not believe Washington had any problem with Japan’s currency policy.

“We will communicate closely with U.S. and other countries’ authorities based on the G7 agreement that excessive, disorderly currency moves could have adverse effects on economies,” Suzuki told a regular news conference.

While the U.S. Treasury said Tokyo’s recent currency intervention was not a factor in deciding to add Japan to the monitoring list, it said intervention should be reserved only for very exceptional circumstances in large, freely traded exchange markets.


Additional reporting by Rocky Swift.


By participating in online discussions you acknowledge that you have agreed to the Terms of Service. An insightful discussion of ideas and viewpoints is encouraged, but comments must be civil and in good taste, with no personal attacks. If your comments are inappropriate, you may be banned from posting. Report comments if you believe they do not follow our guidelines. Having trouble with comments? Learn more here.