Shunichi Suzuki, the finance minister of Japan, promised today, Monday, to react “firmly” to the yen’s erratic movements after the national currency plunged sharply and surpassed 145 against the US dollar in its most recent trading, a level not seen in the nation since its last intervention in the exchange market in late September.
At a news conference, according to the official Kyodo News Agency, Suzuki stated that Japan’s 2.
On September 22, the government pledged 84 trillion yen (about 19 billion dollars) to strengthen the yen as a “warning” to speculators who were solely responsible for the currency’s recent swift movements. He said that the government was keeping a close eye on events.
The yen fell this morning, exceeding 145 against the dollar, even after Suzuki warned of the possibility of another intervention by the Japanese authorities to stop further decline in the yen. According to economists, the effect of buying the yen and intervening in selling the dollar should be short-lived given the strength of the dollar in broad trading amid the possibility of the Federal Reserve raising interest rates again.
Suzuki continued, “Investors dumping the Japanese yen have contributed to the recent volatility. Therefore, we need to reaffirm our commitment to acting decisively when necessary. While the movements of the currency are crucial for stability, quick and unilateral changes are not preferred.
Kyodo claims that the yen’s downward trend is a reflection of the expanding interest rate gap caused by the divergent monetary policies of Japan and the US.
Despite Japan’s primary inflation measure exceeding the central bank’s short-term 2 percent target, the BoJ is still committed to continuing its ultra-low interest rate policy and is still of the opinion that the current inflationary pressure will not last.
Japan’s Finance Minister promises to aggressively react to the yen’s movements.
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