Japan warns against rapid, speculative yen falls

Reuters

Published Feb 13, 2024 06:54PM ET

Updated Feb 13, 2024 08:51PM ET

By Tetsushi Kajimoto

TOKYO (Reuters) -Japan's top currency officials warned on Wednesday against what they described as rapid and speculative yen moves overnight when the Japanese currency broke past 150 yen, undermining the trade-reliant economy.

The dollar rose to three-month peaks on late Tuesday after data showed U.S. inflation rose more than expected in January, reinforcing expectations the Federal Reserve will hold interest rates steady in March.

"We are watching the market even more closely," Finance Minister Shunichi Suzuki told reporters. "Rapid moves are undesirable for the economy."

Asked whether authorities could intervene in the currency market, Suzuki left his office at the Ministry Finance without a word.

Earlier, Japan's top currency diplomat Masato Kanda said the nation would take appropriate actions on forex if needed.

"Recent currency moves are rapid. The yen has weakened by nearly 10 yen over the period of one month or so, such a rapid move is not good for the economy," Kanda, the vice finance minister for international affairs, told reporters at his office.

When asked whether the appropriate steps could include intervening in the market to stem the yen weakness, Kanda said authorities would take the most appropriate action.

"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 pondering the future pace of the Fed rate cuts while speculating about the timing about the Bank of Japan's exit from negative interest rates policy.

Japan intervened in the currency market three times in 2022 when the yen plunged to 32-year lows near 152 yen to the dollar, conducting rare dollar-selling, yen-buying intervention.