Japan's top FX diplomat says authorities to take action as needed on yen

TOKYO, July 13 ------ Japan's top currency diplomat, Masato Kanda, said authorities will take action as needed in the foreign exchange market, after the yen's spike overnight raised market speculation about currency intervention. Kanda, who is vice finance minister for international affairs, also told reporters that recent yen moves were somewhat rapid, but declined to comment on whether authorities had intervened in the currency market to prop up the yen. 

The Japanese yen surged nearly 3% on Thursday in its biggest daily rise since late 2022, a move that local media attributed to a round of official buying to prop up a currency that has languished at 38-year lows. "Interest rate differentials (between Japan and other countries) are narrowing, so it's natural" to believe that recent yen moves are speculative, Kanda told reporters. "I've felt puzzled about recent big currency moves, from the perspective of whether they were in line with fundamentals, and it would be highly concerning if the excessive volatility, driven by speculation, pushes up import prices and negatively affect households," he said. 

Kanda said the Japanese currency has dropped about 21 yen per dollar since the beginning of this year, one of the largest moves since 1990, and has moved about 5% recently. 

Source: reuters.com