Japan maintains warnings of rapid yen moves after G20

TOKYO, Oct 17 (Reuters) – Japanese authorities maintained their verbal warnings to the market on Monday of a firm response to any too rapid decline in the yen, following a 32-year low for the yen last week and meetings of financial leaders who recognized currency volatility.

Japan’s top foreign exchange diplomat, Masato Kanda, told reporters that “every country would react appropriately” on currencies, following a statement by the Group of Seven (G7) last week that said members would watch closely recent volatility.

The statement, however, stopped short of giving signs of articulation intervention.

Finance Minister Shunichi Suzuki, who after meetings last week indicated Japan would not necessarily disclose its currency market interventions, was quoted by the Nikkei business daily on Monday. as told authorities would take decisive action against speculatively motivated excess currency movements.

“I won’t comment on that,” Suzuki told reporters later Monday, when asked if Japan had conducted any stealth interventions since its Sept. 22 foray into the market.

The phrase “decisive steps” is sometimes deployed as a prelude to intervention, although warnings from authorities about currency movements have generally not had consistent or lasting effects on markets.

“We constantly monitor currency movements with a sense of urgency,” Suzuki said.

He reiterated his position in comments to reporters later Monday.

The Japanese currency fell to a 32-year low near 149 yen late last week, sparking speculation about the prospects of a stealth intervention after the effects of intervention last month to support the yen, the first such effort since 1998, had quickly faded.

On Monday, the yen was again hovering around 149 to the dollar, trading around 148.80.

Japanese authorities fear that the sudden and sharp drop in the yen, spurred by interest rate hikes in the United States and elsewhere as Japan sticks to an ultra-accommodative monetary policy, could further increase costs. already high import burdens that weigh on households and businesses.

Sharp moves in the yen also increase business uncertainty in making business decisions.

Japanese policymakers said they would not seek to defend a certain level of the yen and would instead focus on smoothing volatility.

Kanda said participants in last week’s meetings also agreed that their central banks should calibrate the pace of monetary policy tightening, taking into account cross-border ripple effects.

BOJ Governor Haruhiko Kuroda reiterated Monday, however, that the central bank would continue to ease policy as core consumer inflation would peak later in the year through next March and fall below 2% in fiscal year 2023, while cost inflation runs its course.

Reporting by Tetsushi Kajimoto; Editing by Kim Coghill, Sam Holmes and Edmund Klamann

Disclaimer: The opinions expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. This is not a solicitation to trade commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article accept no responsibility for loss and/or damage resulting from the use of this publication.

Previous Mid and Small Cap Picks: ETMarkets Smart Talk: In Earnings Season, Go for Stocks Specific to Mid and Small Caps: Arpit Jain, Arihant Capital
Next Siemens Energy applied for turbine export permit to get 'advice' from Ottawa on Russia sanctions