Japan declares inadmissibility of currency fluctuations
2023.01.26 00:36
Japan declares inadmissibility of currency fluctuations
By Kristina Sobol
Budrigannews.com – Masato Kanda, Japan’s top finance diplomat, told that sharp one-sided currency movements cannot be tolerated. He reaffirmed Tokyo’s determination to intervene in the foreign exchange market to stop any speculative or significant yen movements.
The Sharp (OTC:), “From the viewpoints of the people’s livelihood and corporate activity,” Kanda said on Wednesday, referring to Japan’s first yen-buying intervention in 24 years last year, “one-sided moves like those seen last year are not desirable or cannot be tolerated.”
Kanda was in charge of Japan’s currency intervention last year, which was done to keep the yen from falling to 32-year lows near 152 to the dollar. Since then, the yen has recovered and is currently trading around 130 to the dollar.
When asked whether sharp yen rises warrant action, Kanda, vice finance minister for international affairs, stated in an interview, “There’s no change to this thinking from now on as well.”
Kanda emphasized that while the government strives to maintain stable currency movements, the Bank of Japan (BOJ) is independent in directing monetary policy and focuses on price stability.
He stated:
“The BOJ generally targets price stability, while we aim for currency stability.”
“We are maintaining firm communication with the BOJ and other central banks. However, policy itself is independent,” Kanda stated regarding the monetary policy of the central bank.
Some analysts have criticized the BOJ’s extremely loose monetary policy for causing an unwelcome fall in the yen last year that increased the cost of importing raw materials.
Kanda stated:
that Tokyo intends to lead discussions on expanding a regional multilateral currency swaps arrangement known as the Chiang-Mai Initiative Multilateralisation (CMIM) in order to prepare for upcoming financial crises and natural disasters.
