Japan warns of speculative yen moves, markets wary of further intervention

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  • Deeply concerned with rapid, one-sided movements – finmin Suzuki
  • Government, BOJ share concern over sharp drop in yen – Suzuki
  • BOJ Gov Kuroda to address business leaders later Monday
  • Japan will not intervene to defend the line in the sand – ex-diplomat FX

TOKYO, Sept 26 (Reuters) – Japanese Finance Minister Shunichi Suzuki said authorities were ready to react to speculative currency swings, a new warning that comes days after Tokyo intervened in the foreign exchange market to stem the fall of the yen for the first time in more than two decades. .

Suzuki also told a news conference on Monday that the government and the Bank of Japan (BOJ) were on the same page in sharing concerns about the currency’s sharp declines.

“We are deeply concerned about recent rapid and one-sided market developments, driven in part by speculative trading,” Suzuki told a news conference. .

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The remark came after the government’s decision on Thursday to intervene in the currency market to stem yen weakness by selling dollars and buying yen for the first time since 1998.

The recent sharp declines in the yen, which have pushed up the cost of living for households by driving up the prices of imported fuel and food, have been partly due to the widening divergence between the aggressive monetary tightening of the US Federal Reserve and the BOJ’s ultra-accommodative monetary policy.

BOJ Governor Haruhiko Kuroda will deliver a speech to business leaders in Osaka, western Japan, later Monday, where he can comment on the yen and government intervention.

The dollar added 0.29% to 143.78 yen on Monday, continuing its rally towards Thursday’s 24-year high at 145.90. It fell to 140.31 on the same day after Japanese authorities entered the market.

While the jawbone of government officials may make markets jittery about further intervention, repeatedly intervening in the currency market and selling huge sums of dollars could be difficult due to criticism that Japan may face their G7 counterparts.

“Japan is unlikely to continue to intervene to defend a certain line, such as 145 yen to the dollar,” former senior Japanese diplomat Naoyuki Shinohara told Reuters. Read more

The yen is not alone in its downward spiral. Several other currencies, including the British pound, euro and Chinese yuan, have suffered a hammer blow in part due to aggressive interest rate hikes by the US Federal Reserve in recent months.

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Reporting by Tetsushi Kajimoto; Written by Leika Kihara; Editing by Sam Holmes and Shri Navaratnam

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