Japan Monitors Fluctuations in Forex Market

Japan is closely monitoring volatility in the foreign exchange market, Finance Minister Katsunobu Kato said, amid the yen’s recent weakness against the U.S. dollar, Kyodo News reported.

The Japanese currency recently fell to around an eight-month low, trading in the lower ¥153 range against the U.S. dollar earlier this week.

Noting that “one-sided, rapid moves” have been observed recently, Kato said at a news conference, “It is important for currencies to move in a stable manner, reflecting economic fundamentals. We will closely monitor excessive fluctuations and disorderly movements.”

His remarks came as the Japanese currency fell to around an eight-month low, trading in the lower ¥153 range against the U.S. dollar earlier this week.

The decline was partly driven by fading expectations of an imminent interest rate hike by the Bank of Japan (BOJ).

The yen has also come under selling pressure following the election of Liberal Democratic Party lawmaker Sanae Takaichi — known as a fiscal dove and advocate of easy monetary policy — as the party’s new leader last weekend, making her likely to become Japan’s next prime minister later this month.