Japan's policymakers have reiterated their readiness to take necessary action against rapid yen moves, in the wake of a slide in the currency triggered by bets that the U.S. Federal ReserveFederal Reserve would raise interest rates higher and longer, in the wake of a slide in the currency.
Top currency diplomat Masato Kanda told reporters he was concerned about currency market moves when asked about the yen's sharp overnight falls.
Kanda, vice finance minister for international affairs, said that we are watching yen moves with urgency. He said last week that we will respond appropriately to currency moves without a rule out of any options.
During a briefing on Wednesday, Chief Cabinet Secretary Hirokazu Matsuno said that the government would take necessary action if excessive yen moves continue. He added that rapid currency moves were undesirable.
Japanese policymakers have struggled to slow the yen's recent sharp falls as investors focus on widening policy divergence between the Fed's aggressive rate hike plans and the Bank of Japan's pledge to maintain ultra-loose monetary policy.
The dollar climbed to near a 24 year peak against the yen on Wednesday after hotter than expected U.S. inflation prompted bets for more aggressive monetary tightening by the Fed.
The dollar was at 144.965 yen in the Asian session, edging closer to the psychologically important 145 mark.
The weakness of the yen is causing problems for Japanese policymakers because it hurts households and retailers by inflating the already rising prices of imported fuel and food, once welcomed for giving exports a boost.