Japan finance minister sends warning after Yen’s weakening

Japan’s Finance Minister, Shunichi Suzuki, sent a warning shot to investors, stating that he had advised his Group of 20 counterparts that proper measures in foreign exchange markets will be necessary in some situations.

“I mentioned that excessive movements in the currency market are undesirable and that there are circumstances that necessitate proper reactions,” Suzuki said at a G-20 finance ministers and central bankers conference in Marrakech, Morocco.

Japan’s willingness to intervene to support the yen has been a prominent focus for traders recently, with the currency hovering above 150 per dollar. It has been under pressure this month as a result of rising US rates, with Thursday’s larger-than-expected increase in consumer price data prompting further yen weakness.

Many market participants consider the 150-point barrier as the trigger point for Japan’s currency intervention. Last year, after the yen had fallen below that level, officials purchased it.

Japan’s yen has fallen more than 12% versus the US dollar this year, as interest-rate differentials with the US have remained large.

The Federal Reserve boosted interest rates to combat inflation, while the Bank of Japan committed to maintaining monetary easing.

A top Japanese finance ministry official told reporters that Suzuki did not aim to convey a warning to markets, claiming that it was intended to reaffirm that there has been no change in position on currency problems in light of recent market events.