TOKYO-Japanese is ready to take appropriate measures against excess volatility in the foreign exchange market and is watching currency movements with a great sense of urgency, top government spokesman Hirokazu Matsuno said on Thursday.
The Japanese authorities stepped into the foreign exchange market last month, selling the dollar and buying the yen for the first time in 24 years. Markets are looking for clues on whether they will intervene again or not.
Matsuno told reporters that I won't comment on day-to- day market moves but we're keeping close to watch with a great sense of urgency. We will take appropriate steps when it comes to excess moves. Matsuno did not comment on a statement issued by the Group of Seven on Wednesday, in which they reiterated excessive exchange rate moves were undesirable.
The dollar was near 147 yen, a close to a high of 147.64 recorded in August 1998. When it touched 145.90 per dollar, Japanese authorities intervened to prop up the yen.
Currency intervention could negatively affect the yen's value in the huge foreign exchange market. The dollar's strength has been boosted by interest rate differentials due to the widely divergent U.S. and Japanese monetary policies, but investors doubt the efficacy of intervention.
Minutes from the Federal Reserve's policy meeting last month showed that officials agreed that they needed to raise interest rates to a more restrictive level to meet their goal of lowering broad-based and unacceptably high inflation.
Japanese authorities spent $2.8 trillion yen ($9.2 billion) to intervene in the foreign exchange market to buy yen last month.