Business / Financial Markets

Yen appreciates after Finance Minister Taro Aso says no need for intervention

Bloomberg

Finance Minister Taro Aso said the yen’s recent strengthening isn’t abrupt enough to warrant intervention.

“From our perspective, the current situation doesn’t warrant special intervention. It isn’t rising or falling abruptly,” Aso said, answering questions from a Diet lawmaker Thursday. He didn’t specify what kind of intervention he was talking about, but the remark sent the yen higher.

The yen was trading at 106.63 against the dollar as of 10:47 a.m. in Tokyo, extending gains from the previous day, when it jumped to its highest in more than a year. A higher yen adds to the challenges domestic policymakers face in trying to revive growth and inflation, because it weighs on the earnings of exporters and import prices.

“Aso’s comments confirm that the yen’s level and its move aren’t making him very nervous for now,” said Daisuke Karakama, chief market economist at Mizuho Bank in Tokyo. “Still, a strong yen probably isn’t going to be temporary,” he said. “Japanese officials will have to keep watching the yen closely. If it goes above 100, that will be a critical point and it’s likely to trigger a stronger step by them.”