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Japanese Finance Minister Shunichi Suzuki emphasized the need for a comprehensive assessment when determining if foreign exchange market movements are “excessive.” He confirmed that the government’s approach to dealing with such situations remained unchanged.
Japanese authorities have adopted a strategy focused on the pace of currency fluctuations rather than specific exchange rate levels when considering potential interventions in the currency market to curb excessive volatility, according to analysts.
While many investors typically gauge excessive volatility over shorter timeframes, Masato Kanda, Japan’s top currency diplomat, suggested that it could be assessed over more extended periods. For instance, the yen’s 20-yen depreciation against the dollar since the beginning of the year could be considered an extended period of excessive movement.
Suzuki clarified, “There’s no change in the government stance,” in response to questions regarding intervention and how they define excessive moves. He further stressed that authorities should take multiple factors into account when making judgments on what qualifies as excessive movements.
Additionally, Suzuki affirmed that the government’s intervention approach would remain discreet. This means that authorities would not immediately announce their actions when intervening in the currency market.
