Japan warns of excessive volatility as yen nears fresh lows
Japan is closely monitoring the fluctuations in foreign exchange rates and remains open to considering all possible measures to address the significant instability, stated Finance Minister Shunichi Suzuki on Tuesday, as the yen approached 152 against the U.S. dollar, marking its lowest value in more than 30 years.
"We do not consider the value of currency when evaluating the desirability of these changes. Exchange rates must exhibit stability that accurately reflects underlying economic conditions," stated Suzuki during a press briefing on Tuesday, in response to inquiries concerning the yen's recent decline, which approached the psychologically significant threshold of 152 against the US dollar.
He has made the most recent comments in a sequence of verbal alerts indicating the possibility of intervention due to the yen's devaluation compared to the dollar. Despite the Bank of Japan's recent move to increase interest rates for the first time in 17 years, the currency continues to exhibit fragility.
The interest rate gap between Japan and the United States continues to be a significant factor contributing to the yen's depreciation. This is primarily due to the Bank of Japan's slower pace in increasing interest rates compared to the more assertive approach of the Federal Reserve, which has been actively raising rates in recent years to control inflation.
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