Reuters: Japanese Finance Minister Shunichi Suzuki said Tuesday that strong yen fluctuations are “undesirable” as the currency touched a 24-year low.
Suzuki’s latest verbal caution on the currency was not as forceful as comments made in July, when a decline beyond 139 to the dollar prompted him to be “concerned.” Suzuki’s comments on Tuesday came before the yen’s low.
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Tuesday was the first occasion since 1998 that the yen fell below 141 yen per dollar. Since the start of the year, it’s fallen more than 20% due to differing Japanese and U.S. monetary policies.
The Bank of Japan has committed to sustain strong monetary stimulus to support a shaky economy, but the Federal Reserve is poised to keep raising rates.
Suzuki told reporters at the finance ministry, “Currencies should reflect economic fundamentals.”
Suzuki said a weak yen has pros and cons, but abrupt changes are undesirable.
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Suzuki said Tokyo will take “proper” steps after the yen touched a 20-year low last week.
Some observers argued that Suzuki’s lack of worry suggests no immediate currency market involvement.
“Intervention is theoretically conceivable, but it’s politically tough to sell the dollar when the U.S. is combating inflation,” said Daisaku Ueno, chief FX strategist at Mitsubishi UFJ Morgan Stanley Securities.
“That may be why the minister softened his threat.”
Japan last participated in the foreign exchange market by selling the dollar and buying the yen in June 1998.