Japan does not rule out market intervention if yen moves are excessive, led by speculators, the nation’s top currency diplomat said Wednesday, adding that there are no limits to its market forays.
Masato Kanda, the vice finance minister for international affairs, made the remark in an interview with Kyodo News. Market speculation about official yen-buying to strengthen the Japanese currency against the U.S. dollar has increased in recent days.
Masato Kanda, Japan’s vice finance minister for international affairs, gives an interview at the ministry in Tokyo on July 17, 2024. (Kyodo) ==Kyodo
Japanese officials, including Kanda, have not confirmed whether the government and the Bank of Japan have stepped into the market, though market sources estimate the size of possible yen-buying operations last Thursday and Friday to be over 5 trillion yen ($32 billion).
By remaining reticent on whether they intervened or not, Japanese authorities apparently want to leave markets on edge. The suspected yen-buying operations pushed down the dollar from a 37-year high near 162 yen to the lower 157 yen zone. It was trading around 156 yen late Wednesday afternoon.
“I have no choice but to take appropriate action against excessive fluctuations driven by speculation,” Kanda said, noting that speculators are major drivers of the currency market.
He said Japan is in “extremely close communication” with its counterparts, noting that the country has not faced criticism over its actions because they are “in line with international agreements.”
Official data on market intervention will not be released until the end of July.
The last time it stepped into the market, Japan spent 9.79 trillion yen between April and May to slow the yen’s fall against the dollar.
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