Japan’s finance minister vows ‘appropriate steps’ to tackle volatile yen moves

TOKYO, Oct 20 (Reuters) – Japanese Finance Minister Shunichi Suzuki mentioned the federal government will take applicable steps towards extreme forex market volatility, following the yen’s slide to a recent 32-year low and in the direction of the important thing psychological barrier of 150 to the greenback.

“Latest fast and one-sided yen declines are undesirable. We completely can not tolerate excessively unstable strikes pushed by speculative buying and selling,” Suzuki informed parliament on Thursday.

“We’ll proceed to take applicable steps towards extra volatility, whereas watching forex market developments with a powerful sense of urgency,” he mentioned.

Suzuki’s remarks got here after the yen hit 149.91 to the greenback in in a single day buying and selling, its weakest since 1990. The buck stood round 149.84 in early Asia buying and selling on Thursday.

Markets are on excessive alert on whether or not Japan will intervene within the forex market once more because the yen falls close to the important thing psychological barrier of 150 to the greenback.

The federal government, which holds jurisdiction over forex coverage, spent 2.8 trillion yen ($19 billion) in dollar-selling, yen-buying intervention final month when authorities acted within the markets to prop up the yen for the primary time since 1998.

The yen has fallen towards the greenback as buyers targeted on the coverage divergence between the U.S. Federal Reserve’s aggressive rate of interest hike plan and the Financial institution of Japan’s pledge to maintain financial coverage ultra-loose.

Whereas warning that sharp yen strikes would damage the economic system, BOJ Governor Haruhiko Kuroda on Wednesday dominated out the prospect of elevating the financial institution’s ultra-low rates of interest to average the yen’s downtrend.

The BOJ, nonetheless, is dealing with renewed challenges in conserving long-term rates of interest stably low with its coverage dubbed yield curve management (YCC), beneath which it pumps cash aggressively to cap the 10-year bond yield round 0%.

The yield on 20-year Japanese authorities bonds (JGB) rose to 1.140% on Thursday, the best since September 2015.

The BOJ is extensively anticipated to keep up its huge stimulus programme at its subsequent two-day coverage assembly ending in Oct. 28.

($1 = 149.8700 yen)

Reporting by Kantaro Komiya and Leika Kihara; Enhancing by Chang-Ran Kim and Sam Holmes

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