During a recent press conference, Masato Kanda, Japan’s vice finance minister for international affairs, expressed significant concern regarding speculative activity in the foreign exchange market. Kanda highlighted the recent depreciation of the yen, emphasising that it does not align with the underlying economic fundamentals and appears to be primarily driven by speculative trading.
In the press briefing, Kanda conveyed the government’s preparedness to take necessary measures in response to excessive and unwarranted fluctuations in the currency market. He stressed that no options would be ruled out in addressing these concerns, indicating a willingness to consider direct intervention if deemed necessary.
This warning comes at a time when the yen has been approaching a critical intervention level, prompting heightened vigilance from Japanese authorities. Kanda emphasised the government’s proactive stance with the statement, “We will take appropriate action against excessive fluctuations, without ruling out any options.”
Furthermore, Kanda reiterated Japan’s past intervention in the currency market, particularly in 2022 when the authorities intervened to bolster the yen as it reached ¥151.95 against the US dollar. The reference to this past intervention serves as a reminder of the government’s willingness to act decisively in maintaining stability and countering disruptive market forces.
The firm stance articulated by Kanda reflects the Japanese government’s commitment to preserving the stability of its currency and safeguarding against destabilising speculative activities. By issuing this public warning, Japanese authorities are signalling their determination to address any unwarranted volatility in the foreign exchange market.
The explicit statement from Japan’s currency chief is a clear indication of the seriousness with which the government views the recent trends in the currency market. It serves as a cautionary message to market participants and speculators, urging them to act responsibly and refrain from engaging in activities that could lead to excessive fluctuations in the value of the yen.
In conclusion, Masato Kanda’s strong warnings against speculative moves in the foreign exchange market underscore the Japanese government’s proactive stance in maintaining currency stability. The commitment to take appropriate action and the readiness to consider direct intervention reflect the government’s resolve to address any disruptive developments in the currency market. As such, the government’s vigilance and preparedness are poised to play a crucial role in mitigating unwarranted fluctuations and upholding the integrity of Japan’s currency.