Japan issues fresh warning against yen bears as currency slides
Japanese authorities are ready to take action against speculative and excessively volatile moves in the currency market that hurt the economy, the country's top currency diplomat Masato Kanda said on Friday.
«It's not intended to change the market's trend,» instead it was aimed at smoothing excessive volatility in the currency market, Kanda told reporters when asked about exchange-rate intervention.
«As long as currency rates move stably in line with fundamentals, there's no need to intervene. By contrast, if there is speculative, excessive volatility in the market, we will take resolute action,» said Kanda, who is vice finance minister for international affairs.
The remarks failed to keep the yen from falling below 159 to the dollar for the first time since April 29, as markets continued to focus on the wide interest-rate divergence between Japan and the United States. The dollar stood at 159.12 yen in Asia on Friday.
Chief Cabinet Secretary Yoshimasa Hayashi also warned yen bears against pushing down the currency, saying authorities would continue to monitor moves in the exchange-rate market.
«It's important that exchange rates move in a way that reflects fundamentals,» he told a news conference.
Japan spent 9.8 trillion yen ($61.6 billion) intervening in the foreign exchange market in April and May, after the Japanese currency hit a 34-year low of 160.245 per dollar on April 29.
While the moves have kept the yen from testing fresh lows, they have failed to reverse the currency's downtrend that is hurting
