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Japan ready to take ‘appropriate’ action vs yen volatility — finmin

WASHINGTON — Japanese Finance Minister Shunichi Suzuki reiterated the government’s readiness to take “appropriate action” against excessive currency volatility in the wake of the yen’s fall to 32-year lows driven by red hot US inflation data.

“We cannot tolerate excessive volatility driven by speculative moves. We’re watching market developments with a strong sense of urgency,” Mr. Suzuki said in a news conference on Thursday after attending the G20 finance leaders’ meeting in Washington.

“We’d like to take appropriate action against excessive volatility,” he said, when asked whether Japan could intervene in the currency market again to prop up the yen.

The dollar briefly hit a 32-year peak of 147.665 yen after the release of stronger-than-expected US inflation data, before falling below 147 yen. It stood around 147.275 yen in early Asia trade on Friday.

A Ministry of Finance (MoF) official declined to confirm whether the dollar’s drop below 147 could have been due to intervention, telling reporters decisions on whether or not to disclose any Japanese action in the market is taken on a case-by-case basis.

Mr. Suzuki said he did not hold a bilateral meeting with US Treasury Secretary Janet Yellen during his stay in Washington this week, but that Japan was closely communicating with the United States including on market moves.

Japan intervened in the currency market last month to arrest sharp yen falls, driven largely by the policy divergence between aggressive US interest rate hikes and the Bank of Japan’s (BoJ) resolve to keep monetary policy ultra-loose.

Speaking at the same news conference, BoJ Governor Haruhiko Kuroda said it was “inappropriate” to raise interest rates now in light of Japan’s still-weak economy and modest inflation.

“Japan’s economy is emerging from the COVID-19 pandemic’s wounds but the pace of recovery is slow compared with countries like the United States,” Mr. Kuroda said. — Reuters

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