Japan says it has no limits on its yen intervention
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The yen has also recovered some ground against the Singapore dollar after hitting a record low of 125.33 on April 13.
PHOTO: REUTERS
TOKYO - Japan faces no constraints on how often it can intervene in currency markets and is in daily contact with the US authorities, its top currency diplomat said on May 7, reinforcing Tokyo’s readiness to step into the market to prop up the yen.
The remarks by Mr Atsushi Mimura, the vice-finance minister for international affairs, came ahead of a visit to Tokyo next week by US Treasury Secretary Scott Bessent, who is expected to discuss yen moves with his Japanese counterpart Satsuki Katayama.
Mr Mimura declined to comment on Mr Bessent’s visit but said he remained in daily contact with the US authorities, adding that his counterparts “fully understand our thinking and our actions”.
“Our focus, consistently and without change, is directed in all directions,” he told reporters, stressing that Tokyo continues to see speculative moves in the currency market.
Japan desires a stronger yen primarily to curb high imported inflation – worsened by the spike in oil prices from the Iran war.
Markets are watching closely for any comments Mr Bessent might make on the yen and the Bank of Japan’s monetary policy, given his past remarks favouring speedier rate hikes.
Sources told Reuters that the authorities intervened on April 30, with money market data suggesting they sold about US$35 billion (S$44.3 billion) to support the yen. Since then, the market has seen three abrupt spikes in the yen through to May 6, when it jumped as high as 155 per US dollar.
In late morning trade on May 7, the yen had pared some of those gains to fetch 156.20 per dollar.
The yen has also recovered some ground against the Singapore currency after the reported intervention. It was trading at 123.34 per Singapore dollar as at 11.45am Singapore time, after hitting a record low of 125.33 on April 13.
Mr Mimura declined to say whether the authorities intervened during Japan’s Golden Week holidays, which ran through May 6, saying only that he remained closely focused on movements in the currency market.
He also said the International Monetary Fund’s (IMF) classification of Japan as having a free-floating exchange rate regime does not restrict how often the authorities can intervene, responding to questions over IMF guidelines that flag more than three interventions in six months. REUTERS
