Market players had expected Japan might find it difficult to secure US understanding for currency intervention, given Treasury Secretary Janet Yellen’s firm belief in market-determined exchange rates and the US commitment to battle inflation via monetary tightening, which has fuelled the dollar’s rise.
While Japan’s intervention briefly halted the dollar’s relentless rise against the yen, the US currency has since resumed its climb and was hovering around 145.75 yen in Tuesday afternoon trade in Asia, just below a 24-year high of 145.90 that preceded the Sep 22 intervention.
“It’s true the current market is reflecting the dollar’s solo strength,” Suzuki said, adding that he was carefully watching currency market moves with a “strong sense of urgency”.
Suzuki, who took office a year ago, said he would explain Japan’s recent intervention to financial leaders from the Group of 20 major economies when they gather this week in Washington, where he expected discussions within the context of how monetary tightening could affect the global economy.
Japan’s top currency diplomat, Masato Kanda, also weighed in on Tuesday on the topic of potential currency intervention, saying that authorities were always ready to take necessary steps against excess currency volatility, according to broadcaster TBS.
Kanda was quoted as telling reporters that he could make a decision on currency intervention anywhere, including from an airplane.