Japan’s Chief Cabinet Secretary Yoshimasa Kihara issued some of the strongest verbal warnings on the yen in weeks, signalling rising concern inside the government over the currency’s latest slide. Kihara said authorities are “concerned about forex moves,” adding that recent yen weakness has become “somewhat rapid and one-sided” — language that typically precedes stepped-up monitoring or potential intervention.
He stressed that currencies should move in a “stable manner reflecting fundamentals,” and reiterated that the government stands ready to take “appropriate action” against excessive or disorderly FX swings. The comments put markets on notice that Tokyo is becoming increasingly uncomfortable with the pace of yen depreciation as long-term yields climb.
Kihara also said it is important to keep communicating with domestic and overseas investors to support demand for Japanese government bonds, while noting that long-term rate moves should remain market-determined. He added that policymakers are closely watching the economic impact of rising borrowing costs.
This article was written by Eamonn Sheridan at investinglive.com.