TOKYO (Reuters) -Japan’s top currency diplomat Masato Kanda said on Wednesday authorities were on standby to respond to recent “one-sided, sharp” moves in the yen, escalating his warning to investors against pushing down the currency too much.
“Speculative trading seems to be the biggest factor behind recent currency moves,” Kanda, vice finance minister for international affairs, told reporters on the yen’s declines.
The situation surrounding yen moves has become “more tense” than before, he said, adding that authorities will “respond appropriately without ruling out any options”.
“We’re on standby,” Kanda said when asked about the chance of yen-buying intervention, though he declined to say what kind of action authorities could take and when that will happen.
The yen plummeted across the board on Tuesday, dropping to a 15-year low against the euro and a new one-year trough versus the dollar, after a minor step adopted by the Bank of Japan (BOJ) toward ending years of monetary stimulus failed to appease some investors who had expected a bigger move.
After sliding to 151.715 against the dollar overnight on Tuesday, the yen stood at 151.350 in Asia on Wednesday.
Markets are on alert for possible yen-buying intervention by Japanese authorities, who are under pressure to combat a sustained depreciation of the currency as it pushes up import prices and households’ cost of living.
Tokyo took action in September of last year, its first foray in the market to boost its currency since 1998, after a BOJ decision to maintain its ultra-loose monetary policy drove the yen as low as 145 per dollar. It intervened again in October 2022 after the yen plunged to a 32-year low of 151.94.
Source: Economy - investing.com
