Yen rises as Japan signals chance of currency intervention

TOKYO - Japan sees currency intervention as a possibility in dealing with excessively volatile and speculative moves in the yen, Finance Minister Satsuki Katayama said on Nov 21, in the strongest warning to date against recent falls in the currency.

“We are alarmed by recent one-sided, sharp moves in the currency market,” Mr Katayama told a news conference, when asked about recent declines in the yen.

“It is important for currency rates to move stably reflecting fundamentals. We will take appropriate action as needed against excess volatility and disorderly market moves, including those in the long term,” based on the US-Japan agreement signed in September, he said.

In that agreement between Japan’s finance ministry and the US Treasury Department, the two countries reaffirmed their commitment to “market determined” exchange rates, while agreeing that foreign exchange interventions should be reserved for combating excess volatility.

When asked whether Japan’s response could include currency intervention, Mr Katayama said: “Yes, that’s written in the September statement, so it’s obviously so.”

The US dollar fell 0.14 per cent to 157.26 yen in Asia on the morning of Nov 21 after Mr Katayama’s remarks.

It was relatively unchanged against the Singapore dollar at 120.42 yen as at 8.19am.

The yen has fallen 8.1 per cent against the Singdollar in the last six months, 2.9 per cent in the past month alone. REUTERS