Finance Minister Shunichi Suzuki, speaking on the sidelines of a Group of 20 meeting in Indonesia, voiced his concern over the yen’s sudden drop on the back of some speculative moves.
"The yen has been extending losses since I arrived here, but it’s important for currencies to move in line with fundamentals in a stable manner,” Suzuki told reporters. "I’m worried about the rapid slide in the yen, and the speculative moves seen behind it.”
Suzuki’s comments came after the yen fell to fresh 24-year lows against the dollar this week, slipping past ¥139 to the greenback. While Suzuki largely repeated his most recent remarks on the yen, his reference to concerns over speculative moves appeared to be slightly stronger than his recent language.
The government continues to work closely with the Bank of Japan and will monitor the currency market with a greater sense of urgency, Suzuki said. Sudden, disorderly currency moves can negatively impact economic and financial stability, a point that is made in existing G20 agreements, he said.
Suzuki also added that while communicating with counterparts abroad, Japan is still ready to take appropriate measures on currencies if necessary. His comments suggest that a direct intervention in forex markets is still an option, though experts view the hurdle for intervention as high.
The yen traded at around ¥138.70 per dollar in the evening in Tokyo. The currency breached ¥139 overnight as strong U.S. inflation data released this week added to signs that the Federal Reserve will continue to aggressively raise interest rates to fight inflation.
That’s in contrast to the BOJ, which is expected to stand pat at next week’s policy meeting.