By Tetsushi Kajimoto and Leika Kihara
TOKYO (Reuters) – Japan’s high finance diplomat Masato Kanda mentioned on Tuesday authorities have been in shut contact with U.S. Treasury Secretary Janet Yellen and different international officers “virtually each day” on foreign money and foreign money points. broader monetary markets.
The remarks possible sign Tokyo’s want to maintain market individuals on their toes about the potential for financial intervention to help the , which has hovered close to the 145 to the greenback degree, seen because the authorities’ crosshairs. on the foreign money. .
“We alternate views and talk with authorities in different international locations, together with our ally the US, not solely on currencies, monetary markets, however on numerous different points,” Kanda informed reporters.
Finance Minister Shunichi Suzuki confirmed that Tokyo and Washington have been in shut contact over foreign money actions, however declined to disclose what was underneath dialogue.
“I haven’t got the rest to say past what I mentioned beforehand,” Suzuki informed a information convention on Tuesday when requested concerning the pace of the yen’s latest decline.
Notably, Suzuki didn’t step up his verbal warnings by avoiding feedback akin to “deeply involved about yen weak spot” or able to take a “decisive step” within the foreign exchange market – phrases he used simply earlier than. final yr’s intervention.
On Friday, Suzuki warned of “sharp and one-sided strikes” within the foreign money market.
He additionally mentioned Japan would take acceptable motion if the yen weakened excessively, after the foreign money breached the $145 threshold in opposition to the greenback – a degree round which Japan carried out its first intervention to purchase yen in 24 years final September. Past this degree, some market individuals see 150 yen as a brand new threshold.
“It appears authorities are much less cautious about yen weak spot in comparison with final yr after they entered the market,” mentioned Masafumi Yamamoto, chief strategist at Mizuho Securities.
“150 yen may very well be a set off,” Yamamoto mentioned, including that components such because the weaker yen and inventory market boosting exporter revenues recommend intervention might not be imminent.
Japanese authorities say they’re wanting on the pace of the yen’s fall, quite than the degrees, and whether or not the strikes are pushed by speculators, when deciding whether or not to intervene.
In addition they think about it necessary to hunt the help of G7 companions, significantly the US if the motion includes the greenback, for a coordinated intervention which typically has a extra lasting influence than unilateral motion.
Japan purchased yen in September, its first foray into the market to spice up its foreign money since 1998, after a choice by the Financial institution of Japan (BOJ) to keep up ultra-accommodative coverage triggered the yen to fall to 145 for a greenback. The US Treasury mentioned after final yr’s intervention that such actions must be uncommon.
Final month, the US eliminated Japan from its foreign money watch record in its semi-annual foreign money report. Some market gamers say the transfer might make it simpler for Tokyo to intervene out there.
