© Reuters. Japanese Finance Minister Shunichi Suzuki speaks during a presiding press conference at the G7 Finance Ministers and Central Bank Governors meeting at Toki Messe in Niigata, Japan, Saturday, May 13, 2023. Shuji Kajiyama / Pool via RE
Written by Tetsushi Kajimoto
TOKYO (Reuters) – Japanese Finance Minister Shunichi Suzuki said on Thursday that Japan will not rule out any options in responding to currency market moves that have become excessive, sounding a fresh warning adding that unstable unilateral yen moves are undesirable.
These comments come amid speculation in the market that the authorities may intervene again to support the yen if it crosses a psychological threshold of 145 for the dollar.
“We are watching currency movements closely,” Suzuki told reporters, while declining to comment on currency levels.
Japanese authorities are on the brink as a weaker currency boosts import costs for the resource-poor country, which could harm people’s livelihood and reduce their purchasing power.
In Japan, intervention in selling the dollar and buying the yen is a rarity as the record shows that currency officials mostly focused on curbing the yen’s strength against the dollar, which threatened to hurt the all-important export sector.
While exporters have shifted production abroad over the past decades, making intervention in selling the yen less effective, renewed yen depreciation has caught policymakers by surprise.
But Japanese officials stopped short of announcing “decisive steps” or expressing “deep concern” about the yen’s moves, suggesting action may not be imminent.
The dollar touched a more than seven-month high against the yen on Thursday after the chiefs of the two central banks reaffirmed the policy divergence, with the US central bank tipped to raise interest rates twice more while Japan continues its easing policy.
The dollar’s 11.6% rally since late March to 144.71 yen for the first time since November 10 prompted more verbal warnings from Japanese officials this week that the move may have been too hasty.
The Ministry of Finance and the Bank of Japan (BOJ) intervened in the currency market last fall when the dollar rose beyond 145 yen.
The dollar was last down 0.1 percent at 144.32.