This week’s decline of Yen against Dollar, which seems poised to breach 149 mark, has brought remarks from Japanese officials into sharp focus. Market participants are keen to decipher indications of when Japan might transition from verbal caution to active intervention, even though it’s clear that Japan wouldn’t pre-announce such a move.
Finance Minister Shunichi Suzuki, reiterating his consistent position, stated today, “Foreign exchange rates should be determined by market forces, reflecting fundamentals.”
Suzuki emphasized that “Excessive volatility is undesirable,” and assured that the government is monitoring the currency fluctuations with a “high sense of urgency”. “We will respond as appropriate to excessive volatility without ruling out any options,” he added.
Echoing Suzuki’s sentiments, the newly appointed Economy Minister, Yoshitaka Shindo, stressed the significance of stable currency movements that mirror economic realities.
Pointing out the multifaceted impact of the Yen’s position, Shindo elaborated, “Weak Yen has various effects on economy such as raising import costs for consumers, improving competitiveness of exporters.”
With these comments, the stage is set for a heightened scrutiny of Japan’s potential interventions in the currency market. Market participants will no doubt remain vigilant to further remarks and actions by Japanese officials in the coming days.
