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Speculative moves behind rapid yen weakening, warns Japan finance minister

TOKYO: Japanese Finance Minister Shunichi Suzuki warned on Friday (Jul 15) against "speculative moves" seen behind a rapid yen weakening, using the strongest wording to date as the yen weakened to fresh 24-year lows beyond 139 yen to the dollar.

"I'm concerned about recent sharp yen weakening," Suzuki told reporters, adding that the government would liaise with the Bank of Japan while closely watching currency moves more urgently.

"We will take appropriate response if necessary while striving to closely communicating with currency authorities from other countries," Suzuki said, signalling his readiness to intervene to stem the yen weakness.

However, Japan is unlikely to gain support from the United States for any joint action to weaken the dollar as the Federal Reserve is scrambling to raise interest rates to defeat surging inflation.

The Bank of Japan on the other hand is expected to continue powerful monetary easing to back a fragile economy, causing interest rate differentials to weaken the yen.

Suzuki said he told G20 that Japan was closely watching sudden currency moves with a high sense of urgency.

Suzuki was speaking to reporters after attending the first day of the Group of 20 financial leaders' two-day gathering at the resort island of Bali in Indonesia, with the global economy, health and low-income countries' debt problems on agenda.

With the Ukrainian finance minister attending the meeting online, Suzuki said Japan reaffirmed solidarity with Ukraine and condemned Russia over its invasion of the country.

Suzuki told G20 that "global economy is facing many difficulties due to Russia's war (in Ukraine). Russia makes it difficult to hold constructive debate at G20 ... Russia is responsible for all the economic consequences of the war".

Russia was represented by vice finance minister at the meeting and Suzuki decided to deliver harsh messages against him without walking out. Other G7 nations also refrained from walking out, he said, adding that it was hard to tell whether the G20 could issue a communique.

At the meeting, Suzuki expressed gratitude towards many countries that have offered condolences to slain ex-Prime Minister Shinzo Abe who was shot to death a week ago by a man while campaigning for last Sunday's upper house election.

Source: Reuters/gs


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