By Makiko Yamazaki
TOKYO (Reuters) – Top Japanese finance officials said on Friday the government is “alarmed” by recent foreign exchange moves and is ready to intervene if speculative moves were deemed excessive, as the yen resumed its rapid downturn.
Against the Japanese yen, the dollar rose to a top of 157.93 on Friday, its highest since July, after the Bank of Japan kept interest rates unchanged on Thursday and its governor offered few clues on how soon it could push up borrowing costs.
“We have been recently seeing one-sided and sharp moves,” Finance Minister Katsunobu Kato told a regular news conference on Friday.
“As we are alarmed by recent currency market developments including those driven by speculators, we’ll take appropriate action against excessive moves,” he said.
It is rare for Japanese policymakers to explicitly describe the currency market situation as alarming, signaling the government’s heightened concerns over the sliding yen.
Speaking to reporters later in the day, Japan’s top currency diplomat Atsushi Mimura also reiterated the government’s stance, saying that he has been alarmed by currency moves and flagging a readiness to take appropriate action.
The BOJ’s rate-setting meeting on Thursday concluded hours after the U.S. Federal Reserve cut interest rates but signalled a more cautious path of easing next year, suggesting that the U.S.-Japan interest rate differentials may not narrow as fast as previously expected.
Asked about U.S.-Japan rate differentials and the BOJ’s communications style, Mimura, vice finance minister for international affairs, declined to comment.
Japan last conducted a yen-buying intervention in July to support its currency after it tumbled to a 38-year low below 161 per dollar.
Kato, in the news conference, also said finance leaders of the Group of Seven (G7) nations held an online meeting last night under Italy’s presidency to discuss support for Ukraine and the impact of artificial intelligence on the global economy.
Kato said he and BOJ Governor Kazuo Ueda joined the call.