Market watchers were in a frenzy after Japanese Yen surged from 150 to the 147 zone against Dollar overnight , fuelling speculation that Japan’s government may have stealthily intervened to push up the struggling currency. While evidence of a Yen-buying, Dollar-selling maneuver abounds, top officials in Japan remained tight-lipped today.
Finance Minister Shunichi Suzuki, when confronted by reporters, chose the path of silence over confirmation. He held back from validating the swirl of speculations about intervention. Suzuki reiterated a standard narrative, emphasizing the desirability of market-driven, stable currency movements that mirror economic fundamentals.
“Currency rates ought to move stably driven by markets, reflecting fundamentals. Sharp moves are undesirable,” Suzuki noted. “The government is monitoring market developments very carefully with a sense of urgency. We will take appropriate steps against excessive volatility without excluding any options.”
Masato Kanda, the top currency diplomat, provided insights into the government’s assessment mechanism for currency movements. “If currencies move too much on a single day or, say, a week, that’s judged as excess volatility,” Kanda explained.
The implied volatility stands as a critical metric, among others, shaping the official perspective on whether Yen’s moves are reaching alarming amplitudes.
Kanda further outlined that even in the absence of abrupt shifts, a gradual yet one-sided build-up of significant currency movements over time is also classified as excessive volatility. However, he too refrained from offering a direct commentary on the overnight upswing of Yen.
