Japan has been trying to shore up the battered currency while the central bank keeps interest rates ultra-low, in reverse of the global trend of monetary policy tightening which widened the gap with US rates.
The Finance Ministry intervened in several stages on Friday. “We maintain our position of being prepared to take appropriate measures against excessive currency volatility”Prime Minister Fumio Kishida told the media on Saturday after meeting his Australian counterpart, Anthony Albanese, reiterating that such volatility could not be tolerated.
Kishida added that “I won’t make any detailed comments on currencies” when asked about Friday’s intervention. Japan’s top foreign exchange diplomat, Masato Kanda, also declined to say whether the Finance Ministry had intervened.
“We are not going to comment now on whether or not we have carried out an intervention”said Kanda, deputy finance minister for international affairs, adding that the ministry would not confirm whether there was an intervention for some time, indicating a possible “sneaky intervention” to engage in a war of nerves against investors selling the yen.
The Finance Ministry also bought yen on September 22, as investors focused on the growing divergence between the Bank of Japan’s ultra-loose monetary policy and the US Federal Reserve’s aggressive rate hikes.
Source: Ambito
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