© Reuters. FILE PHOTO: Japanese Finance Minister Shunichi Suzuki speaks during the presidency press conference at the G7 meeting of finance ministers and central bank governors, at Toki Messe in Niigata, Japan, Saturday, May 13, 2023. Shuji Kajiyama/Pool via RE
By Tetsushi Kajimoto
TOKYO (Reuters) – Japan will not rule out any options in responding to currency market moves that become excessive, Finance Minister Shunichi Suzuki said on Thursday, firing off a fresh warning and adding that one-sided, unstable yen moves were undesirable.
The comments come amid market speculation that authorities could intervene again to support the yen if it goes past a psychological threshold of 145 to the dollar.
“We are watching the currency moves even more closely,” Suzuki told reporters, while declining to comment on currency levels.
Japanese authorities are on the edge as a weaker currency boosts import costs for the resource-poor nation, which would damage people’s livelihood and squeeze their purchasing power.
In Japan, dollar-selling, yen-buying intervention is rare as the record shows its currency officials focused mostly on curbing the yen’s strength against the dollar, which threatened to damage the all-important export sector.
While exporters have shifted production offshore over the past decades, making yen-selling intervention less effective, renewed yen declines have caught policymakers off-guard.
Japanese officials stopped short of declaring “decisive steps” or expressing “deep concern” about yen moves, however, which suggested that action might not be imminent.
The dollar touched a more than seven-month high against the yen on Thursday after the heads of the two central banks reaffirmed the divergence in policy, with the U.S. central bank leaning to two more rate hikes while Japan keeps easing policy.
The dollar’s surge of as much as 11.6% since late March to reach 144.71 yen for the first time since Nov. 10 has spurred more verbal warnings from Japanese officials this week that the move may have been too rapid.
The ministry of finance and the Bank of Japan (BOJ) stepped into the currency market last autumn when the dollar strengthened beyond 145 yen.
The dollar was last down 0.1% at 144.32.