A man walks past an electric monitor displaying the Japanese yen exchange rate against the U.S. dollar, Euro and other foreign currencies outside a brokerage in Tokyo.ISSEI KATO/Reuters
Japanese Finance Minister Shunichi Suzuki said on Tuesday authorities were watching the currency market closely and stood ready to respond, repeating a warning against speculative moves as the yen hovered near a one-year low against the dollar.
The yen slid to within a hair of 150 per dollar, near a level that prompted intervention a year ago and putting traders on watch for action by the Japanese authorities.
Speaking at a regularly scheduled news conference, Suzuki said authorities were watching market moves with a high sense of urgency.
“It was important for currencies to move stably, reflecting economic fundamentals,” Suzuki told reporters. “We will be fully prepared to respond with a high sense of urgency.”
Suzuki repeated the government’s stance that whether to intervene would be determined by volatility, and would not target specific levels.
A weak yen boosts prices by raising the cost of imports, Suzuki said, adding that other factors also affect cost-driven inflation, including the war in Ukraine and cuts in crude oil output by oil-producing nations.
As for newly issued 10-year government bonds that carry a yield of 0.8%, a decade-high level, Suzuki said long-term interest rates are set by the market, reflecting various factors.
Suzuki said that, generally speaking, rises in long-term rates push up borrowing costs, and authorities are therefore closely watching the impact of moves in long-term rates and how they may affect households and businesses.