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Japanese yen banknotes are seen in this illustration photo taken on June 15, 2022. Reuters/Florence Low/Illustration/File Photo Obtain Licensing Rights
TOKYO, Sept 1 (Reuters) – Japanese Finance Minister Shunichi Suzuki said on Friday that currencies should be determined by the market, although sudden changes are undesirable, while there were no clear signs of market intervention to prop up the weakening yen. , which is accelerating. import bill.
“Currencies should reflect economic fundamentals… I am watching currency movements closely,” Suzuki told reporters, following the standard official line.
“There has been no change in my outlook on currencies since what I said earlier. There is nothing to add,” Suzuki said.
Some market players were surprised by the lack of determination to prevent the yen from falling more than 145 yen against the dollar. A breach of that level last September triggered Japan’s first yen-buying intervention in 24 years.
“I was surprised by the lack of enthusiasm in Suzuki’s comment,” said Daisaku Ueno, chief FX strategist at Mitsubishi UFJ Securities. “It made me think that the Japanese authorities would wait until the dollar was near its 32-year low of 152 yen to intervene.”
Currency markets are rife with speculation that Japanese authorities may change their stance on a weaker yen by focusing on fiscal policy measures such as maintaining gasoline subsidies to cushion the impact of price hikes on consumers.
Officials also say the weaker yen is helping attract more foreign tourists, boosting the services sector.
Another possibility was that Japan could not obtain US approval on the dollar-selling intervention.
The yen has been on a weak note recently as investors bet that the US Federal Reserve could continue to raise interest rates, or keep rates high for longer as it tries to rein in inflation, while The Bank of Japan maintains its very loose policy.
Traders are watching for any signs of intervention by Japanese authorities to shore up the ailing currency.
However, Japanese authorities have rarely issued verbal warnings since last month against speculators trying to sell the yen.
The weak yen has pushed up the import bill for fuel and food, stripping households of purchasing power and prompting Prime Minister Fumio Kishida to scramble for measures to subsidize retail gasoline prices and reduce increases in utility bills. inspired to do.
The BOJ remains a standout among global central banks because of its loose monetary policy, even as it is gradually moving away from yield curve control.
Reporting by Tetsushi Kajimoto; Editing by Tom Hogg and Kim Coghill
Our Standards: The Thomson Reuters Trust Principles.
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Source: www.reuters.com
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