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Japan appoints a new top foreign exchange official, yen's sharp decline sparks pessimism.

Japan appoints a new top foreign exchange official, yen's sharp decline sparks pessimism.

2024-06-28
SummaryJapan appointed a new foreign exchange official this Friday after the previous official failed to stop the significant decline in the yen's exchange rate.

Japan appointed a new top foreign exchange official on Friday as the yen fell to its lowest level against the dollar in 38 years, fueling market expectations of imminent intervention by Tokyo to support the weak currency.

Financial regulatory veteran Junshi Mimura replaced Masato Kanda, who led the record-breaking yen-buying intervention earlier this year.

The change is part of the annual personnel reshuffle, coinciding with heightened official warnings about potential interventions.

Finance Minister Shunichi Suzuki said on Friday that authorities are "deeply concerned" about the economic impact of "rapid and one-sided" forex movements.

The yen fell below 161 to the dollar on Friday, reaching its lowest level since 1986.

During a routine press conference, Suzuki stated that authorities will appropriately respond to excessive currency fluctuations to maintain confidence in the yen.

"The government is closely monitoring forex market trends with a strong sense of urgency," Suzuki said, adding that continuing fiscal reforms is crucial.

On Friday morning, the yen fell to 161.155 to the dollar. Despite the overnight decline in U.S. Treasury yields and strong consumer price data from Tokyo, it failed to halt the yen's slide.

As traders focus on the interest rate differential between Japan and the U.S., Japanese authorities are under new pressure to curb the yen's sharp decline.

In late April and early May, Tokyo spent 9.8 trillion yen (approximately $60.91 billion) intervening in the forex market as the yen dropped to 160.245 to the dollar on April 29, marking the lowest level in 34 years at that time.

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