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Japan’s Finance Minister Issues New Warning Over Volatile Yen Fluctuations

Japanese Finance Minister Signals Potential Action to Stabilize Yen Amid Market Volatility

During the recent International Monetary Fund (IMF) and World Bank spring meetings in Washington, Japanese Finance Minister Shunichi Suzuki reiterated concerns over extreme fluctuations in currency markets, specifically addressing the recent sharp decline of the yen. Suzuki emphasized the readiness of Japanese authorities to counteract excessive movements in the forex markets.

Suzuki highlighted the increasing volatility prompted by speculation on the future monetary policies of the U.S. and European central banks, which could shift towards less restrictive measures. “The uncertainty over these policy shifts has significantly heightened market volatility, including in the forex markets,” Suzuki stated during his speech to the IMF’s steering committee.

He stressed the importance of stable currency exchange rates that reflect economic fundamentals and voiced his disapproval of erratic market behavior. “We are committed to taking necessary actions to curb excessive volatility,” Suzuki affirmed.

This stance comes as the yen plunged to a 34-year low, primarily driven by a strong dollar rally that dampened expectations of an imminent U.S. interest rate cut. This significant depreciation has increased the likelihood of intervention by Japanese financial authorities to support their currency.

In a historic move, the finance leaders of the U.S., Japan, and South Korea held their first trilateral finance dialogue earlier this week, where they agreed to “consult closely” concerning the foreign exchange markets. This agreement acknowledges the growing concerns voiced by Tokyo and Seoul regarding the precipitous falls of their currencies.