Finance Minister Shunichi Suzuki on Friday stressed the need for exchange rates to remain stable and reflect economic fundamentals, saying excessive fluctuations should be corrected.
At a news conference during his visit to Georgia, Suzuki declined to comment on whether Japan had intervened in foreign exchange markets when the yen soared in a short period of time in New York on Wednesday.
Japanese authorities have threatened to take action against excessive fluctuations in currency markets, including the yen's sharp fall against the US dollar.
Finance Minister Shunichi Suzuki (center) and Bank of Japan Vice President Nora Mitsu Himi (right) hold a press conference in Tbilisi on May 3, 2024. (Kyodo News)
Suzuki held a press conference in Tbilisi, Georgia's capital, on the sidelines of an Asian Development Bank-related meeting, saying, “Forex rates should reflect fundamentals and be determined by market forces.It is desirable for them to remain stable.'' Stated.
Suzuki added that rapid changes will have a negative impact on households and businesses when making plans. “It may be necessary to smooth out the excesses,” he said.
Despite the market buzz about foreign exchange intervention by the Japanese authorities, Japanese government officials remain silent, leaving traders in the dark.
“Stealth intervention” is used to make traders nervous and discourage bold action.
Japan may have spent about 8 trillion yen ($52 billion) this week to enter the market and slow the yen's decline, based on data from the Bank of Japan and market sources.
Finance Minister Shunichi Suzuki (fifth from the left) and Bank of Japan Deputy Governor Mitsu Himi Nora (fourth from the left) address the parties attending a meeting of Japan, China, and South Korea's finance ministers, central bank governors, and association members. Association of Southeast Asian Nations held in Tbilisi on May 3, 2024 (Kyodo News)
The yen, which fell above 160 yen to the dollar earlier this week, has regained some strength. It rose to the 151 zone on Friday.
However, the yen continues to weaken, reflecting the widening difference in interest rates between Japan and the United States.
The Bank of Japan raised interest rates for the first time in 17 years in March, but there are no plans for a rapid rate hike. Meanwhile, the US Federal Reserve is expected to take longer to start cutting interest rates.
Related coverage:
The yen briefly rose to 151 yen in the New York market following weak US labor data.
Japan is likely to suffer a loss of 3 trillion yen due to new suspicions of market interference
Bank of Japan's March minutes show no urgency for further rate hikes
