Makiko Yamazaki, Takaya Yamaguchi
TOKYO (Reuters) – Japan's top currency diplomat warned on Monday against speculative moves in foreign exchange markets as the yen fell below 149 yen to the dollar.
Atsushi Mimura told reporters, “We will monitor movements in the foreign exchange market, including speculative trading, with a sense of urgency,'' reviving the verbal warning tactic frequently used by his predecessor, Masato Kanda. Ta.
Mr. Mimura declined to comment on the details of the current market situation.
Separately, newly appointed Finance Minister Katsunobu Kato said the government would monitor how rapid currency fluctuations could affect the economy and take measures as necessary. said.
“The government will closely monitor the impact and consider what measures to take,” Kato said in an interview with a small group of reporters on Monday.
In early trading on Monday, the yen fell to 149.10 yen against the dollar, its lowest since Aug. 16. After September's surprisingly strong U.S. jobs report, traders stopped expecting the Federal Reserve to cut rates further.
Japan last intervened to buy the yen in late July to support its currency after it fell below 161 yen to the dollar, the lowest in 38 years.
The yen has also been under pressure since new Prime Minister Shigeru Ishiba surprised markets by saying the economy was not ready for further rate hikes, a sign of the Bank of Japan's previous easing of decades of easy monetary policy. This is a clear change from the previous support.
In an interview on Monday, Governor Kato was asked whether the policy rate should be kept at 0.25%, and said the government would leave specific policy measures to the Bank of Japan.
“The government expects the Bank of Japan to communicate thoroughly with the market and take appropriate policies to achieve the 2% inflation target in a stable and sustainable manner,” he said.
The Bank of Japan raised interest rates for the first time in 17 years in March, arguing that the pace of rise in prices and wages showed Japan was finally shaking its stubborn deflationary mindset. The central bank unexpectedly raised interest rates again in July, causing turmoil in domestic markets.
(Reporting by Makiko Yamazaki and Takaya Yamaguchi; Additional reporting by Rocky Swift; Editing by Muralikumar Anantharaman and Sri Navaratnam)
