Japan's top currency diplomat Masato Kanda said on Monday that Japan is ready to act against excessive market volatility at any time. The yen's exchange rate against the dollar approached 160, raising market concerns about possible new interventions.
Kanda told reporters, "We do not comment on daily fluctuations in the exchange rate because such comments could have unexpected effects on the market, but we are always prepared to take appropriate action in the event of excessive volatility."
Japan's Finance Minister Shunichi Suzuki also warned against excessive volatility, stating that Tokyo "will take appropriate measures as necessary."
Suzuki declined to comment on whether he believes the current market volatility is excessive but emphasized that it is ideal for currency movements to remain stable and reflect fundamentals.
This month, the yen has been under pressure due to the Bank of Japan's decision not to reduce bond purchase stimulus measures before the July meeting. In early trading on Monday, the dollar-yen exchange rate was 159.87.
Kanda, as the Vice Minister of Finance for International Affairs, stated that he is aware that the yen's exchange rate against the dollar approaching 160 has raised market alertness for intervention, but the authorities have not set a specific intervention level.
It is widely believed in the market that 160 yen to the dollar is the authorities' bottom line. Japan spent about 9.8 trillion yen (approximately 61.64 billion dollars) on April 29 to pull the exchange rate back from a 34-year low of 160.245.
However, due to significant differences in interest rates between Japan and the United States, these measures failed to reverse the yen's weakness.
