Japan Finance Minister closely communicating on yen moves with US

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Japan Finance Minister closely communicating on yen moves with US



Japan will communicate closely with the United States and other countries to respond to currency moves appropriately, Finance Minister Shunichi Suzuki said, as policymakers kept a wary watch on the yen after it slumped to six-year lows against the dollar.


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Speaking to reporters after a cabinet meeting, Suzuki stressed the importance of stable currency moves, saying rapid moves were undesirable.


The Japanese currency broke beyond 125 yen on Monday (Apr 11) due to widening interest rate differentials between Japan and the United States, as bets the US Federal Reserve will accelerate tightening contrasted with the Bank of Japan's commitment to keep in place its ultra-easy monetary settings.


"The government is closely watching currency moves, including the recent yen weakening, and its impact on Japanese economy with a sense of urgency," Suzuki said.


He noted the Group of Seven (G7) advanced economies have agreed to have exchange rates set by markets, to closely consult on action in the currency market and have acknowledge that excess volatility and disorderly moves can have adverse effects on economic and financial stability.


"Based on the G7 agreement, we'll respond appropriately while closely communicating with currency authorities of the United States and others," Suzuki said.


Despite the verbal jawboning, investors see little chance of immediate action by Japanese currency authorities, especially as long as policymakers maintain that the current yen weakness is good for Japan, said Daisuke Karakama, chief market economist at Mizuho Bank.