© Reuters. FILE PHOTO: Banknotes of Japanese yen are seen in this illustration picture taken September 23, 2022. REUTERS/Florence Lo/Illustration
By Tetsushi Kajimoto
TOKYO (Reuters) -Japan will respond firmly to excessive currency fluctuations, its top currency diplomat Masato Kanda said, following the yen’s sharp fall to a 32-year low to the dollar.
“Each country would respond appropriately” to an agreement on foreign exchange market moves by the Group of Seven (G7) and G20 meetings last week, Kanda, vice finance minister for international affairs, told reporters at the Ministry of Finance.
Kanda made the comment as the Japanese currency hovered close to a 32-year low near 149 yen, stoking concerns about boosting already high import costs that are squeezing households and companies.
That sharp decline comes despite Japan’s intervention in the foreign exchange market last month to prop up the yen, its first such effort since 1998.
Once welcomed for giving exports a boost, the yen’s excessive weakness could hurt households and retailers by inflating already rising prices of imported fuel and food.
In addition, the yen’s sharp falls heighten uncertainty for firms in making business decisions.
The yen has depreciated around 20% this year, as the Bank of Japan (BOJ) has kept policy super loose while many of its global peers, such as the U.S. Federal Reserve, have aggressively raised interest rates to combat surging inflation.
Separately, Finance Minister Shunichi Suzuki said on Monday authorities would take decisive steps against excess currency moves driven by speculation, the business daily reported.
“We’re constantly watching currency movements with a sense of urgency, the Nikkei quoted the minister as saying.