Kyodo News reported that the dollar traded in the mid-¥159 range against the yen Thursday as Vice-Finance Minister for International Affairs Atsushi Mimura criticized the pace of the yen’s decline, with the interest-rate gap adding pressure.
Mimura told reporters that recent currency moves were “too rapid.” He also said it was “too early” to forget what happened that summer. Kyodo separately identified July 31 as the date of a joint Japan-U.S. intervention. The remarks follow EconoTimes’ earlier coverage of Mimura’s warning on currency moves.
The yen had crossed ¥163 before Japan’s repeated market operations this summer, a level unseen for about four decades, Kyodo reported. The outlet said those interventions have not stopped the currency’s decline, which it linked in part to fiscal concerns as Prime Minister Sanae Takaichi advocates more government spending. Kyodo also reported that yen weakness is adding to Japan’s import costs as energy prices rise amid Middle East tensions, a strain for a country with limited domestic resources.
Japan’s policy rate is currently 1.25%, below rates in the United States and Europe, Kyodo reported. The Bank of Japan has signaled that further increases may follow if the risk of inflation exceeding its 2% target grows. Markets expect the Bank of Japan to raise interest rates again as early as its December meeting, the outlet said.
Dealers cited stronger-than-expected U.S. consumer inflation data as a factor behind overnight expectations of a Federal Reserve rate increase, Kyodo News reported.
