Japan will take appropriate steps vs excessive yen moves

By Tetsushi Kajimoto and Leika Kihara

TOKYO (Reuters) – Japan will take appropriate steps against excessive moves in the yen “without ruling out any options”, its top currency diplomat said on Wednesday, keeping markets on alert over the chance of yen-buying intervention.

Masato Kanda, Japan’s vice finance minister for international affairs, told reporters he would not comment on whether Tokyo intervened in the exchange-rate market overnight to prop up the yen.

“If currencies move too much on a single day or, say, a week, that’s judged as excess volatility,” Kanda said.

“Even if that’s not the case, if we see one-sided moves accumulate into very big moves in a certain period of time, that’s also excess volatility,” he said.

Kanda added that authorities were looking at various factors, including implied volatility, in determining whether yen moves were excessive.

“Our stance against excessive moves is unchanged,” Kanda told reporters. He declined to comment on whether the overnight yen moves were excessive.

After sliding below the psychologically important 150 per dollar mark, the yen strengthened sharply overnight on Tuesday, leading some market participants to believe Tokyo had intervened to support the currency. The dollar stood at 149.100 yen in Asia on Wednesday.

Japanese authorities are facing renewed pressure to combat a sustained depreciation of the yen, as investors confront the prospect of higher-for-longer U.S. interest rates while the Bank of Japan remains wedded to its super-low interest rate policy.

Tokyo last intervened to buy yen in September and October last year, when the Japanese currency eventually slumped to a 32-year low of 151.94 per dollar.

“We’ve only taken action that gained understanding, and we think this will remain the case,” Kanda said, when asked whether Tokyo can garner support from the United States and other Group of Seven partners on intervention.