Japanese Prime Minister Naoto Kan said excessive currency movements are undesirable and the government is ready to take action on the yen if needed after it reached a 15-year high against the dollar.
“We will take bold measures if they are absolutely necessary,” Kan said in Tokyo today in comments televised by national broadcaster NHK.
Japan sold more than 2 trillion yen ($24 billion) in its first foreign-exchange market intervention in six years on Sept. 15. The action failed to arrest gains in the yen, which has appreciated more than 10 percent against the dollar this year.
Japan’s currency policy is “the responsibility of the finance minister” Vice Finance Minister Mitsuru Sakurai said at a press conference earlier today when asked about the yen’s climb to its highest level since April 1995.
The yen traded at 81.22 against the dollar as of 8:00 p.m. in Tokyo, after earlier touching 80.89.
Kan’s comments on the yen come after he suggested China and South Korea should stop preventing their currencies from appreciating.
“Guiding one’s currency lower is against the overall coordination process,” among countries in the Group of 20, Kan said yesterday in parliament. “We’d like South Korea and China to take responsible actions according to the common rules.”
South Korea’s Kim Ik Joo, director-general of international finance at the Ministry of Strategy and Finance, said he called Japan’s Ministry of Finance to protest. He declined to say who he talked with. A Japanese official declined to comment, saying on condition of anonymity that the government was in close contact with South Korea.
Japan’s own intervention in currency markets sparked criticism from European policymakers and U.S. politicians.