Japanese Finance Minister Shunichi Suzuki stated on Thursday that authorities are prepared to take necessary actions on currencies, signaling readiness to intervene after the yen’s decline to a 38-year low against the dollar. “It’s desirable for exchange rates to move stably. Rapid, one-sided moves are undesirable. In particular, we’re deeply concerned about the effect on the economy,” Suzuki told reporters. “We are watching moves with a high sense of urgency, analyzing the factors behind the moves, and will take necessary actions,” he said.
Chief Cabinet Secretary Yoshimasa Hayashi also mentioned that Tokyo would take “appropriate” action against excessive currency moves but declined to comment on specific yen levels or potential interventions. The yen stood at 160.45 per dollar in Asia on Thursday, close to the 38-year low of 160.88 reached on Wednesday.
Analysts doubt whether verbal warnings and interventions can reverse the weak-yen trend, driven largely by uncertainty over the U.S. Federal Reserve’s interest rate cuts. The Bank of Japan, while not signaling an imminent interest rate hike, will hold its next policy meeting on July 30-31. Tokyo spent 9.8 trillion yen ($61 billion) intervening in the forex market at the end of April and early May, after the yen hit a 34-year low of 160.245 per dollar on April 29.