TOKYO/SAPPORO, Japan (Reuters) – Japanese policymakers on Wednesday offered mild but harmonized verbal warnings against excess currency turbulence, cautioning markets against pushing the yen down too rapidly.
“In general, excessive exchange-rate volatility is undesirable,” Kyodo news agency quoted Finance Minister Taro Aso as telling reporters before departing Tokyo to attend a Group of Seven finance leaders’ gathering in Germany.
Aso’s comment echoed statements earlier in the day by Chief Cabinet Secretary Yoshihide Suga, who noted that the accelerated rate of the yen’s descent had not yet reached levels considered too rapid.
“As agreed by the Group of 20 nations, excessive exchange-rate volatility is undesirable. But I don’t think recent moves have reached a point that are considered excessive,” the government’s top spokesman told a regular news conference.
“In any case, we will to continue monitor currency moves carefully,” he added.
The yen fell to an eight-year low against the dollar this week after a batch of upbeat data bolstered the case for a U.S. interest rate hike this year.
Japan’s export-reliant economy has historically suffered from a strong yen, so many policymakers have welcomed mild yen declines, but some of them have begun to worry about the drawbacks – such as hurting consumer sentiment by pushing up import costs and food prices.
Bank of Japan Deputy Governor Kikuo Iwata on Wednesday repeated the central bank’s standard line that exchange rates ought to move in a way that reflects economic fundamentals, sidestepping a question on whether further yen falls could be unwelcome for the economy.
(Editing by Eric Meijer)
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