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Japan's finance minister says FX volatility rises as yen hits fresh lows

by Tetsuji Kajimoto

TOKYO (Reuters) – Japanese Finance Minister Shunichi Suzuki reiterated on Tuesday that sharp swings in the yen are “not desirable” and he is watching for rising volatility in foreign exchange markets “Sense of urgency” as the currency hits a new 24 new year low.

This is Suzuki’s latest verbal warning against the currency but it’s not as strong as the July comment when the dollar fell below prompted him to express “concern”. Suzuki’s comments on Tuesday came before the yen hit a new low.

The exchange rate of the yen against the dollar fell below 141 for the first time since 1998 on Tuesday, the last A transaction time is 141. 17 per dollar. It has fallen more than 20% since the beginning of the year due to differences in monetary policy between Japan and the US.

The Federal Reserve is expected to continue raising interest rates for the time being, despite the Bank of Japan vowing to stick to strong monetary stimulus to support the fragile economy.

“It is important for the currency to stabilize and reflect the fundamentals of the economy,” Suzuki told reporters at the Finance Ministry. But sharp fluctuations are not desirable.

Tokyo will take “appropriate” action as needed after the yen hit its lowest level in more than two decades last week, Suzuki said on Friday.

Some analysts said Suzuki did not use the word “concerned,” thus suggesting that intervention in currency markets may not be imminent.

“Intervention may be technically feasible, but at a time when the U.S. is fighting inflation , it is difficult to sell the dollar politically,” said Daisaku Ueno, chief foreign exchange strategist at Mitsubishi UFJ (NYSE:

. MUFG) Morgan Stanley (NYSE: MS) securities.

” This may be the reason for the minister to moderate his verbal warning a little. “

The last time Japan intervened was in June 1998 the yen fell to more than 146 against the dollar Selling USD and buying JPY in the foreign exchange market at exchange rate.



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