Japan on Monday said it would intervene in the currency market again if needed and is monitoring the market with a high degree of vigilance.
Finance Minister Shunichi Suzuki told a press briefing on the matter that the government is on high alert against speculative yen moves against the U.S. dollar and is “strongly concerned about one-sided, rapid yen moves.”
His remarks follow Japan’s yen-buying, dollar-selling operation last Thursday, the first since 1998.
The operation came on the heels of the Bank of Japan (BOJ) staying pat on its ultra-loose monetary policy, with Governor Haruhiko Kuroda saying it was unlikely the BOJ would hike its rates in the next few years.
“We took appropriate action against excessive volatility driven by speculators. The intervention has had a certain effect,” Suzuki said.
“There is no change in our stance that we will take further action if needed,” he added.
Following the intervention, the dollar dropped to the 140 yen zone after crossing the psychologically important 145 yen mark. On Monday, the dollar was trading around the 144 yen line.
Local media cited market analysts as doubting whether Japan’s market intervention had any impact in countering the strength of the dollar versus the yen, however, owing to a growing interest rate gap between the BOJ and the U.S. Federal Reserve.
The Fed, in stark contrast to the BOJ, has been aggressively hiking its rates to combat soaring inflation.
