TOKYO (Reuters) – Japanese Finance Minister Shunichi Suzuki emphasized the complexity of determining whether foreign exchange market movements are “excessive” and stated that the government’s approach to dealing with them remains unchanged.
According to analysts, Japanese authorities are now prioritizing the speed of currency fluctuations rather than specific levels when considering the need for intervention to curb excessive volatility in the currency market.
Defining excessive volatility is not a straightforward task. Masato Kanda, Japan’s top currency diplomat, highlighted that it can be assessed over a longer period, such as since the beginning of the year. For instance, the yen has weakened by approximately 20 yen against the dollar during this time frame.
When asked about intervention and the criteria for determining excessive moves, Minister Suzuki affirmed that there have been no changes in the government’s stance. He stressed the importance of considering various factors and making a comprehensive judgment on what constitutes excessive movements in the currency market.
Furthermore, Suzuki mentioned that any intervention by the authorities would continue to be conducted discreetly, without immediate public announcements.
Here is a breakdown of the key points:
1. Complexity of Determining “Excessive” Moves
The Finance Minister acknowledged the multifaceted nature of assessing whether foreign exchange market movements are excessive. This complexity arises from the consideration of various factors.
2. Shift in Focus
Japanese authorities now prioritize the speed of currency fluctuations rather than specific levels when deciding whether intervention is necessary to address excessive volatility in the currency market.
3. Defining Excessive Volatility
Masato Kanda, Japan’s top currency diplomat, emphasized that excessive moves should be evaluated over a longer period, such as since the beginning of the year. For instance, the yen weakened by approximately 20 yen against the dollar during this timeframe.
4. Unchanged Government Stance
Minister Suzuki confirmed that there have been no changes in the government’s approach to intervention and determining excessive moves in the currency market.
5. Comprehensive Judgment
Suzuki highlighted the importance of considering various factors and making a comprehensive judgment when determining what constitutes excessive movements in the currency market.
6. Discreet Intervention
The government will continue to intervene in the currency market discreetly, without immediate public announcements.
It is crucial to navigate the complexities of the foreign exchange market and carefully assess the factors contributing to excessive movements. By prioritizing the speed of currency fluctuations, Japanese authorities aim to address volatility effectively and maintain stability in the market.
