“In line with our policy, the government will continue to closely monitor developments in the foreign exchange market and will take all necessary measures,” Shunichi Suzuki told the media.
The Japanese currency surpassed the barrier of 155 yen per dollar, despite the recent change in the country’s monetary policy, which for years imposed negative interest rates to try to control inflation.
“We are concerned about the downside of the weaker yen,” Suzuki said, adding that dealing with rising prices is a priority for the Japanese government.
A weak yen within manageable margins tends to boost the stock market, as it inflates foreign remittances from Japanese exporters, but also increases the costs of imports of energy and raw materials, on which the country is dependent.
The yen has been depreciating sharply against the dollar, among other currencies, largely due to the interest rate differential between the two countries. The trend has accelerated in recent weeks because the U.S. central bank is not expected to start cutting rates anytime soon.
The Japanese government last intervened in October 2022, when the Japanese currency approached 152 units against the dollar.
In recent statements, Japan’s central bank governor Kazuo Ueda has indicated he will consider a policy change if the impact of the weak yen on inflation “cannot be ignored”.
The Japanese central bank will conclude its monthly monetary policy meeting during the day, with most analysts expecting the institution to maintain its main reference interest rates.
