In a rare joint statement, Japan’s government and central bank expressed concern about recent sharp falls in the yen, the strongest warning to date that Tokyo may intervene to support the currency, which has fallen to 20-year lows.
Following a meeting with his counterpart at the Bank of Japan (BOJ), top currency diplomat Masato Kanda told reporters that Tokyo will ‘respond flexibly with all options on the table.’
He declined to say whether Tokyo could negotiate a joint entry into the market with other countries.
The G7, of which Japan is a member, has long held that markets should determine currency rates, but that the group will closely coordinate on currency movements, and that excessive and disorderly exchange-rate movements can harm growth.
‘We have seen sharp yen declines and are concerned about recent currency market movements,’ the Ministry of Finance, the Bank of Japan, and the Financial Services Agency said in a joint statement issued following their executives’ meeting.
Officials from the three institutions meet on a regular basis, usually to warn markets about sudden market movements. However, it is unusual for them to issue a joint statement with explicit warnings about currency movements.
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