(Bloomberg) — The yen inched lower against the dollar toward a key level on Monday, even as Japan’s top monetary official warned that authorities were ready to intervene in currency markets around the clock if necessary.
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Deputy Finance Minister Kanda Masato said, “Excessive fluctuations in exchange rates will have a negative impact on the national economy. If there are excessive movements based on speculation, we are prepared to take appropriate measures.”
At the time Kanda spoke, the yen was approaching 160 yen to the dollar, closing in on the weakness of 160.17 yen it hit on April 29, when Japan was last believed to have entered the market. As of 9:01 a.m. Tokyo time, the yen was down 0.1% to 159.91 yen.
Japan acknowledged spending 9.8 trillion yen ($61.3 billion) intervening in foreign exchange markets in the month between April 26 and May 29. Authorities did not specify the dates of the interventions, but trading patterns indicate there were two large bouts of intervention, on April 29 and May 1. Foreign exchange reserve data suggests Japan likely sold U.S. Treasury securities to fund the interventions.
Kanda said authorities from around the world communicate on a daily basis on a wide range of issues, including currency.
Kanda said his colleagues in Washington have no problem with Japan’s intervention. “The most important thing for them is transparency,” he said.
According to Kanda, the U.S. decision to add Japan to its currency monitoring list did not affect Japan’s currency strategy.
(Updated with comments)
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