Tokyo’s top foreign currency official said on Wednesday that Japanese and American officials constantly exchange information about currencies and agree that excessive volatility is undesirable.
In an interview with reporters in his office, Vice Minister of Finance for International Affairs Masato Kanda addressed remarks made the day before by U.S. Treasury Secretary Janet Yellen.
According to Yellen, it “depends on the details” of the scenario as to whether Washington would be sympathetic to further Japanese intervention in the market by purchasing yen.
If the extreme manoeuvres continue, “We won’t rule out any options,” Kanda said.
Kanda’s most recent verbal intervention highlights the concerns of policymakers about the yen’s continued depreciation, which raises the cost of living for households through greater import expenses and firms that depend on raw material imports.
The government of Prime Minister Fumio Kishida intends to implement a supplementary budget for this fiscal year to assist households in adjusting to rising living expenses, which could exacerbate the nation’s already heavy debt load.
When the dollar hit about 145 yen to the dollar in September of last year, Japan engaged in its first dollar-selling intervention to support the yen in 24 years.
As the dollar approached 152 yen in October, authorities stepped in twice. Since then, they have avoided the market while sporadically issuing rhetorical warnings to support the yen.
Members of the Group of Seven (G7) countries are required to notify their counterparts if they intervene in the foreign exchange market.