Japan signals readiness to act in FX market if sharp yen volatility persists

Japan’s Finance Minister Shunichi Suzuki said on Friday he would not rule out any options in taking action in the foreign exchange market if sharp weakening in the yen persisted.

Suzuki told reporters at the ministry that he was concerned about the recent rapid and one-sided weakening in the yen, which hit a 24-year low against the dollar earlier this month.

His comments reiterated similar rhetoric by Japanese authorities earlier this month.

Earlier on Wednesday, the Bank of Japan conducted a rate check with banks in apparent preparation to step in to tame sharp yen falls.

“If such moves persist, the authorities would take necessary action without ruling out any options,” Suzuki said.

“It’s important for currencies to move stably reflecting economic fundamentals. Sharp moves are undesirable.”

Suzuki said a weak yen has both merits and demerits, and he could not label it as right or wrong.

The dollar was down 0.37% against the Japanese yen to 142.96, helped a little by speculation of a potential currency intervention by Japanese authorities.

Market attention is focused on a slew of monetary policy meetings by the Federal Reserve, the Bank of Japan, and the Bank of England next week.

The divergence in monetary policy between Japan and other developed nations could further weaken the yen with the Fed raising interest rates and the BOJ maintaining its massive stimulus.

Officials would do the utmost to maximise benefits of the weak yen in areas such as inbound tourism to attract travellers to Japan to stimulate the economy, Suzuki said.

The government also aims to compile an economic package with targeted spending to help those affected by weak yen’s impact on the rising costs of living, he said.

 

[Source: Reuters / Photos: Flikr]

Related Articles

General, Holiday/Home Makers, Investors/Business
News
Japan's sluggish economy, already weakened before the pandemic, faces the possible collapse of its national currency. The Japanese government is walking back years of harsh travel restrictions as the yen collapses in value due to a stagnant economy and weak trade. Japan until recently has all but completely rejected foreigners seeking entry or re-entry into the country. What can it do to get back on its feet? "Amid the weakening yen, [incoming tourism] will have the greatest effect," Kihara said, according to the Japan Times. "And there are the autumn leaves and powder snow. There are many foreign visitors who want to come visit Japan."
Investors/Business, General
Information, Interview
GA Technologies navigates Japan's aging real estate sector, focusing on digital transformation. Challenges persist in housing transactions due to preferences for physical inspections, contrasting rental and investment sectors embracing digitalization. Their explosive growth hinges on capturing the digital wave's potential and ambitious global expansion strategies. Leveraging acquisitions, like Dear Life Corporation, they aim to consolidate strengths in local markets, positioning themselves as a key player in the evolving global real estate landscape.
Investors/Business
News
The head of one of Japan’s biggest and most conservative insurance groups is looking to roll out nursing and preventive healthcare services in ageing societies around the world in a bid to become a global giant.
Holiday/Home Makers, General
Information, News
Japan's housing market is grappling with an oversupply crisis, marked by nearly 9 million vacant properties and an 80% surge in vacancy rates over two decades. This trend, driven by demographic shifts like declining birth rates, poses economic and safety challenges. Potential solutions, such as foreign investment or immigration, are complicated by Japan's insular culture and economic considerations.