Japan's Finance Minister, Shunichi Suzuki, has issued the strongest warning in weeks regarding potential intervention in the currency market, even as the yen continues to hover near its weakest level in nearly four decades.
He stated on Friday that "we will take decisive action if necessary," employing phrasing typically associated with direct intervention in foreign exchange markets. The minister declined to comment on specific exchange rate levels.
On Friday morning, the yen was trading around 162.43 per US dollar and showed little movement following his remarks.
The lack of any significant reaction in the yen to the warning suggests that verbal intervention alone is losing its potency without the backing of concrete action.
Data from Japan's Ministry of Finance shows that in the month leading up to May 27, Japan spent a record 11.73 trillion yen ($72.2 billion) to support its currency, but appears to have taken no such action since.
While the intervention initially provided some support for the yen, the currency subsequently resumed its decline, hitting 162.84 on July 1, marking its lowest level in nearly 40 years.
At the end of June, the minister had warned of "bold action," but has since largely reverted to using more measured language, stating that "appropriate action will be taken."
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