Japan is facing challenges from volatility in currency markets and should be prepared to take steps to halt the rise of the yen, the nation’s top currency official said.
“We are still facing challenges from a very volatile exchange-rate market,” Takehiko Nakao, vice finance minister for international affairs, said at an event in Tokyo today. “There has been an appreciation of the yen” he said. “It was a kind of jump. I think this a very speculative excessive movement. We are now closely monitoring it and we should take action if necessary.”
The Japanese currency has strengthened more than 5 percent against the dollar in the past two months. Nakao’s comments came after Finance Minister Jun Azumi hinted at potential intervention on the currency market on May 18, saying he’s ready to take “appropriate action” if necessary.
The yen weakened today amid speculation the Bank of Japan will add to stimulus measures this week to support growth and weaken the currency. It fell 0.4 percent to 79.35 per dollar as of 10:51 a.m. in London.
BOJ officials will gather for a two-day meeting starting tomorrow. The central bank expanded its asset-purchase program in February and April. Last week, two bond-buying operations failed to attract the central bank’s target for sell offers.