TOKYO: Japan has not eased its vigilance over exchange-rate movements, its top currency diplomat Atsushi Mimura said on Thursday, issuing a fresh warning against currency volatility after the yen surged against the dollar.
“There has been various speculation on whether we conducted rate checks after the release of U.S. employment data, to which I have no intention to comment,” Mimura told reporters.
“But our policy remains unchanged. We will continue to closely monitor markets with a high sense of urgency and maintain close communication with markets. We have not lowered our guard at all,” he said.
Mimura, vice finance minister for currency affairs, also said that Tokyo has been maintaining close contact with U.S. authorities.
The yen, last trading at 153.02 per dollar, has rebounded sharply from near the psychologically significant 160 mark that analysts say could trigger intervention by Japanese policymakers.
The currency briefly weakened following the release of U.S. nonfarm payrolls data on Wednesday before spiking, sparking speculation of Tokyo conducting rate checks – often seen as a precursor to intervention.
The yen has surged nearly 3 per cent since Prime Minister Sanae Takaichi’s election victory on Sunday as investors believe her sweeping mandate could pave the way for fiscal discipline as it eliminates the need for negotiations with opposition parties.
A weak yen has posed a challenge for Japanese policymakers as it pushes up import costs and broader inflation.
The currency spiked on three occasions last month, with the sharpest moves occurring after reports of unusual rate checks by the New York Federal Reserve, fuelling speculation about the possibility of the first joint U.S.-Japan intervention in 15 years.
