Japan's finance minister vows 'appropriate steps' to tackle volatile yen moves

TOKYO - Japanese Finance Minister Shunichi Suzuki said the government will take appropriate steps against excessive currency market volatility, following the yen's slide to a fresh 32-year low and towards the key psychological barrier of 150 to the dollar.

"Recent rapid and one-sided yen declines are undesirable. We absolutely cannot tolerate excessively volatile moves driven by speculative trading," Suzuki told parliament on Thursday (Oct 20).

"We will continue to take appropriate steps against excess volatility, while watching currency market developments with a strong sense of urgency," he said.

Suzuki's remarks came after the yen hit 149.91 to the dollar in overnight trading, its weakest since 1990. The greenback stood around 149.84 in early Asia trading on Thursday.

Markets are on high alert on whether Japan will intervene in the currency market again as the yen falls near the key psychological barrier of 150 to the dollar.

The government, which holds jurisdiction over currency policy, spent 2.8 trillion yen (S$26.7 billion) in dollar-selling, yen-buying intervention last month when authorities acted in the markets to prop up the yen for the first time since 1998.

The yen has fallen against the dollar as investors focused on the policy divergence between the US Federal Reserve's aggressive interest rate hike plan and the Bank of Japan's pledge to keep monetary policy ultra-loose.

While warning that sharp yen moves would hurt the economy, Bank of Japan (BOJ) Governor Haruhiko Kuroda on Wednesday ruled out the chance of raising the bank's ultra-low interest rates to moderate the yen's downtrend.

The BOJ, however, is facing renewed challenges in keeping long-term interest rates stably low with its policy dubbed yield curve control (YCC), under which it pumps money aggressively to cap the 10-year bond yield around zero per cent.

The yield on 20-year Japanese government bonds (JGB) rose to 1.140 per cent on Thursday, the highest since September 2015.

The BOJ is widely expected to maintain its massive stimulus programme at its next two-day policy meeting ending in Oct 28.

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