Japan’s Katayama Says to Take Bold FX Steps Decisively as Needed

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Or sign-in if you have an account.Satsuki Katayama Photographer: Kiyoshi Ota/Bloomberg Photo by Kiyoshi Ota /Bloomberg(Bloomberg) — Japanese authorities will take bold steps to counter moves in the currency market decisively as needed, and a US Treasury report issued overnight underscores a shared view that excessive currency moves are undesirable, Finance Minister Satsuki Katayama said.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an Account“We’ll respond appropriately whenever necessary, and that means taking decisive action with determination” in the currency market, Katayama told reporters at a briefing Friday.Katayama noted that the US Treasury Department’s semiannual foreign-exchange report released Thursday makes reference to the points agreed upon in the joint statement issued by the Japanese and US finance ministers last September.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try again“Naturally, the premise that excessive volatility is undesirable is fundamental to that agreement,” she said. “We maintain close, continuous consultation — 24 hours a day, 365 days a year — in line with that joint statement.”Declines in the yen over multiple years through April 2026 have “resulted in substantial yen undervaluation,” the Treasury report said. It said yen weakness has persisted despite a narrowing of US-Japan interest rate differentials, adding, “while global factors such as financial market volatility and oil prices have likely affected the yen, excess volatility in the yen is undesirable.” The Treasury said “monetary policy normalization would help anchor inflation expectations and reduce excessive exchange rate volatility.”Japan’s currency was trading around 163.83 per dollar Friday morning in Tokyo, not far from the 40-year low of 163.99 touched overnight. It’s dropped about 0.9% so far this week, putting it on course for its worst weekly performance since May, when it resumed weakening in the aftermath of Japan’s record intervention.Meanwhile, the dollar has climbed as escalating tensions in the Middle East spark concerns over energy supply disruptions and fuel expectations that the Federal Reserve will raise interest rates.“Expectations for US rate hikes have intensified due to the deteriorating situation in the Middle East,” said Masafumi Yamamoto, chief FX strategist at Mizuho Securities. “Should crude oil prices rise further, the dollar-yen exchange rate will likely test the 165 level.”Yamamoto said that with the Federal Reserve and the Bank of Japan both set to decide policy in the coming week, there’s a chance that the Fed maintains a hawkish stance while the BOJ fails to signal hawkishness exceeding what’s already factored in, raising the likelihood it may be perceived as dovish.—With assistance from Masahiro Hidaka.(Updates with analyst’s comments.)This advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. 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