Japan's financial authorities have raised alarms over the yen's swift fluctuations, particularly after it surged past the 150 yen mark, posing threats to the country's trade-dependent economy. The U.S. dollar reached a three-month high following reports of an unexpected rise in U.S. inflation in January, suggesting the Federal Reserve might maintain current interest rates into March. "We are watching the market even more closely," Finance Minister Shunichi Suzuki stated, emphasizing the adverse effects of rapid currency movements on the economy.
Masato Kanda, Japan's chief currency diplomat, echoed the concerns, highlighting the yen's nearly 10 yen depreciation within a month as harmful. Kanda assured that the authorities are vigilant and prepared to act against market volatility, comparing their readiness to natural disaster responses. Despite Japan's interventions in the currency market last year to counter the yen's decline to near 32-year lows, Kanda clarified that there's no fixed exchange rate target, focusing instead on the speed and deviation of currency movements from fundamentals.
Source: reuters.com