Japanese Finance Minister Addresses Yen Exchange Rate Volatility

Japanese Finance Minister Shunichi Suzuki reiterated the authorities' readiness to address excessive exchange-rate volatility, emphasizing their commitment to prevent destabilizing fluctuations in the yen's value. Suzuki refrained from explicitly stating that decisive action would be taken against excessive moves, as he did last week when the yen experienced a significant decline to a 34-year low. This nuanced approach suggests that officials are closely monitoring currency movements before considering any intervention.

During a regular news conference on Tuesday, Suzuki emphasized that appropriate action would be taken against excessive volatility, with all options remaining on the table. This statement reflects the government's stance of remaining vigilant and responsive to market developments. Despite the Bank of Japan's recent decision to end eight years of negative interest rates, the yen has continued to depreciate. Traders interpreted the central bank's dovish language as a signal that any future rate hikes would be deferred.

Federal Reserve Chair Jerome Powell's comments further bolstered the dollar's strength by indicating that there was no urgency to reduce interest rates. This reinforced market expectations of a persistent interest rate differential between the U.S. and Japan. With the dollar hovering around 151.610 yen in Asia on Tuesday, near its 34-year high, markets remain attentive to the possibility of intervention by Tokyo to stabilize the yen's exchange rate.