Japan says it stands by to deal with ‘unilateral’ currency fluctuations as yen plummets

TOKYO, Nov 1 (Reuters) – Japan’s top currency diplomat, Masato Kanda, said on Wednesday that authorities were standing by to respond to the yen’s recent “unilateral and sharp” movements, adding that the currency is important. As prices fell below normal levels, he said he had strengthened his warning to speculators. .

Markets have been wary of possible yen-buying intervention in recent months by Japanese authorities, which are under pressure to counter continued currency weakness that is pushing up import prices and household living costs.

The yen came under widespread selling pressure again on Tuesday after markets deemed adjustments to the Bank of Japan’s interest rate policy to be insufficient to close wide interest rate differentials that have weighed on the yen for years. Ta.

Speaking to reporters regarding the weak yen, Deputy Foreign and Finance Minister Kanda said, “The biggest factor in recent exchange rate fluctuations seems to be speculative trading.”

He said the situation surrounding the yen’s movements was “more tense” than before, adding that authorities “will respond appropriately without excluding all options.”

In response to a question about the possibility of yen-buying intervention, Kanda said, “We are waiting,” but he was not sure what measures the authorities might take or when they would take place. avoided making a statement.

Chief Cabinet Secretary Hirokazu Matsuno also told reporters on Wednesday that authorities were prepared to take appropriate measures against excessive yen movements “without excluding all options.”

The tone of the authorities’ warning was stronger than last week’s warning, in which Finance Minister Shunichi Suzuki said excessive currency fluctuations were undesirable and authorities were watching developments with a “strong sense of crisis.”

The yen fell to a one-year low against the dollar and against the euro on Tuesday, as the Bank of Japan’s decision disappointed markets that had hoped for a bigger step toward ending years of massive economic stimulus. But it hit a 15-year low.

Japan’s currency rose 0.27% to 151.26 to the dollar on Wednesday following Kanda’s warning, but remained close to its one-year low of 151.74 set a day earlier.

In September of last year, the Japanese government intervened in the market for the first time since 1998 in response to the Bank of Japan’s decision to maintain ultra-easy monetary policy, causing the yen to fall to 145 yen to the dollar. It re-entered the market in October 2022 after the yen plummeted to a 32-year low of 151.94 yen.

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