TOKYO: Japanese policymakers warned against investors selling off the Japanese currency as the dollar rose to a fresh 24 year high against the yen on Wednesday, raising speculation about a second round of intervention.
The US currency went to 146.35 yen, a level not seen since August 1998 during the Asian financial crisis, and moved above levels that Japanese authorities intervened last month to stem excessive yen weakening.
On Wednesday, the yen was trading around 146.30 to the dollar as traders braced for the US inflation data and its implications on future US rate hikes.
Chief Cabinet Secretary Hirokazu Matsuno said that we are closely watching foreign exchange moves with a high sense of urgency and ready to take appropriate steps on excess moves.
Finance Minister Shunichi Suzuki was quoted by Jiji Press as saying that there was no change in the country's position and that it would take necessary steps in the foreign exchange market if necessary.
Suzuki said the speed of forex moves, not any levels, was important as he was traveling to Washington to attend a gathering of the financial leaders from the Group of 20 major economies.
Neither Matsuno nor Suzuki used stronger expressions in describing yen moves on Wednesday, such as excessive, one-sided or speculative, suggesting that currency intervention may not be imminent.
In a market intervention for the first time in 24 years, Japanese authorities sold dollars and bought yen last month, spending 2.8 trillion yen US $19.2 billion to slow a slide in the yen that was considered a threat to the economy.
Market players were closely watching how Suzuki might explain Japan's stance on intervention and whether the country would gain backing from the US and other countries at the Group of 20 meeting in Washington this week.
Japanese officials stress that they do not necessarily need US consent to take action in the currency markets, but they stress the importance of seeking US understanding, which is seen as lending them legitimacy.
Investors think solo action by Japan is less effective than concerted intervention.