Japan’s finance minister makes statements about intervention in the currency market

Japanese Finance Minister Shunichi Suzuki said during press statements on Friday that the markets should determine the value of currencies, despite the fact that sudden moves in the currency markets are undesirable, and this is a sign of the possibility of intervention in the currency market to support the weak yen, which leads to higher import bills.

Suzuki told reporters that the currency exchange rate should reflect the economic fundamentals, and that he is closely monitoring the movements of the yen in the currency markets.

It should be noted that while participating in a Fed research seminar, the governor of the Bank of Japan, Kazuo Ueda, made some points related to inflation and its accommodative monetary policy. Meanwhile, the policymaker reported that he believes core inflation is still slightly below the BOJ’s 2% target.

Therefore, Ueda added that this is why the Bank of Japan stuck to the current accommodative monetary policy, noting that core inflation is expected to slow down for the rest of 2023. In addition, the BOJ governor noted that domestic demand continues to follow a healthy trend, but we will watch whether this trend will continue in the third quarter. Moreover, Ueda said that the strength of the U.S. economy provides some compensation for Japan, adding that the pace of economic activity in China has been disappointing.