Japanese Finance Minister Shunichi Suzuki said on Wednesday that he “won't rule out any steps including "decisive steps" to respond to disorderly FX moves.”
Additional takeaways
Closely watching FX moves with a high sense of urgency.
Won't rule out any steps to respond to disorderly FX moves.
Specific monetary policy steps up to the Bank of Japan (BoJ) to decide.
It's very important for the government and the BoJ to closely coordinate on policies, exchange information with each other.
We will ensure to take utmost measures for FX stability with eye on market moves.
His reaction comes in response to the USD/JPY pair climbing to a fresh 34-year high of 151.97.
Following his comments, USD/JPY corrected sharply to near 151.70, still up 0.11% on the day.
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The current BoJ ultra-loose monetary policy, based on massive stimulus to the economy, has caused the Yen to depreciate against its main currency peers. This process has exacerbated more recently due to an increasing policy divergence between the Bank of Japan and other main central banks, which have opted to increase interest rates sharply to fight decades-high levels of inflation.
The BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supports a widening of the differential between the 10-year US and Japanese bonds, which favors the US Dollar against the Japanese Yen.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD holds gains near 1.1200 ahead of German inflation data
EUR/USD is holding the upside near 1.1200 in the European morning on Monday. Hot German regional CPI data underpins the Euro while the US Dollar drops ahead of Fed Chair Powell's speech. Germany's national inflation data is next in focus.
GBP/USD retakes 1.3400 as USD struggles ahead of Powell
GBP/USD is battling 1.3400 in European trading on Monday, reversing a dip led by the downward revision to the UK Q2 GDP data. A subdued US Dollar and Fed-BoE policy divergence offset the risk-off mood, supporting the pair ahead of Fed Chair Jerome Powell's speech.
Gold price remains confined in a range below all-time peak, Powell's speech awaited
Gold price remains on the defensive heading into the European session on Monday, albeit it lacks follow-through selling and hovers just below the all-time peak touched last week.
Seven Fundamentals: Nonfarm Payrolls caps a week packed with market-moving events Premium
Nonfarm Payrolls figures stand out after a steady buildup. A speech by Fed Chair Powell stands out as chatter of another 50 bps cut. The Middle East may rock Oil and Gold prices after a turbulent weekend.
RBA widely expected to keep key interest rate unchanged amid persisting price pressures
The Reserve Bank of Australia is likely to continue bucking the trend adopted by major central banks of the dovish policy pivot, opting to maintain the policy for the seventh consecutive meeting on Tuesday.
Five best Forex brokers in 2024
VERIFIED Choosing the best Forex broker in 2024 requires careful consideration of certain essential factors. With the wide array of options available, it is crucial to find a broker that aligns with your trading style, experience level, and financial goals.