Japanese Finance Minister Says Government Could Act Against Yen Rise

Finance Minister Taro Aso said on Tuesday that Japan could act against the yen’s rise as needed, based on a G20 agreement backing currency stability, if “one-sided” and “speculative” moves were observed in the currency market.

Aso told reporters that finance leaders from the Group of 20 major economies agreed in Shanghai in February that excessive volatility and disorderly moves in the exchange rates hurt financial stability, and he expected the G20 to discuss the issue again when they meet this week in Washington.

Aso has the power as finance minister to instruct the Bank of Japan to intervene in the currency market. It cannot do so on its own authority.

The dollar was hovering near 108 yen, not far off a 17-month low of 107.63 yen hit this week on bets that the U.S. Federal Reserve would go slow in future interest rate hikes.

“We would take necessary steps under certain circumstances if one-sided and speculative moves were observed. I believe we can respond in line with the G20 agreement.”

The finance minister’s comments echo remarks by Chief Cabinet Secretary Yoshihide Suga, the government’s top spokesman, that the G20 agreement would not prevent Japan from acting in the market.

via Reuters

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