Japan's top FX diplomat warns against speculative moves as yen falls
Adds finmin interview comments
By Makiko Yamazaki and Takaya Yamaguchi
TOKYO, Oct 7 (Reuters) -Japan's top currency diplomat on Monday issued a warning against speculative moves on the foreign exchange market as the yen fell below 149 per dollar.
"We will monitor currency market moves including speculative trading with a sense of urgency," Atsushi Mimura told reporters, reviving a verbal warning tactic that his predecessor, Masato Kanda, frequently used.
Mimura declined to comment on the specifics of the current market situation.
Separately, Katsunobu Kato, the nation's newly appointed finance minister, said the government would monitor how rapid currency moves could potentially impact the economy and would take action if necessary.
"The government will consider what action should be taken while monitoring the impacts," Kato said in an interview with a small group of reporters on Monday.
The yen depreciated to 149.10 versus the dollar in early trading on Monday, the weakest since Aug. 16, after a surprisingly strong U.S. jobs report for September led traders to cut bets that the Federal Reserve will make further large interest rate cuts.
Japan last conducted yen-buying intervention in late July to support its currency after it tumbled to a 38-year low below 161 per dollar.
The yen has also been under pressure since new Japanese premier Shigeru Ishiba stunned markets when he said the economy was not ready for further rate hikes, an apparent about-face from his previous support for the Bank of Japan's unwinding decades of loose monetary policy.
In Monday's interview, Kato said the government would leave specific policy steps to the Bank of Japan (BOJ), when asked whether the policy rate should be maintained at 0.25%.
"The government hopes that the BOJ will communicate with markets thoroughly and take appropriate policy to achieve its 2% inflation target in a stable and sustainable manner," he said.
The BOJ in March delivered its first rate hike in 17 years, arguing the pace of price and wage increases showed Japan was finally shaking its entrenched deflationary mindset. The central bank unexpectedly increased rates again in July, triggering a shakeout in domestic markets.
Reporting by Makiko Yamazaki, Takaya Yamaguchi; Additional reporting by Rocky Swift; Editing by Muralikumar Anantharaman & Shri Navaratnam
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
