Japanese Finance Minister Shunichi Suzuki speaks during the presidency press conference at the G7 meeting of finance ministers and central bank governors, at Toki Messe in Niigata, Japan, Saturday, May 13, 2023.
Pool | Via Reuters
Japanese Finance Minister Shunichi Suzuki on Friday backed currency interventions by his country’s policymakers if the yen moved in sharp directions that started to affect households and companies.
Speaking to reporters at the Asian Development Bank’s annual meeting in Tbilisi, Georgia, he said it was desirable for exchange rates to move stably.
“When there is an excessive movement, it may be necessary to smooth it out,” he told CNBC’s Dan Murphy, according to a translation.
The finance minister declined to comment when asked whether current levels for the yen were appropriate. He also would not comment on whether his ministry had intervened in the currency market recently, amid intense speculation.
On Wednesday, the currency strengthened by more than 2% to trade near 153 against the dollar, which is likely to have been caused by an intervention, according to some market analysts. Japanese authorities are yet to issue an official statement confirming their role in propping up the currency.
“The government has been refusing to disclose whether they’ve been intervening or not, but I don’t think many people have any doubts,” Nicholas Smith, Japan strategist at CLSA, told CNBC earlier this week.
A weak yen against the greenback can hurt the economy by raising import costs and Suzuki’s words on Friday are more confirmation that policymakers are keeping a close eye on the exchange rate.
The yen was trading at 152.85 against the dollar on Friday evening Asia time. In the past few decades, while other global central banks have tightened their policies, Japan has maintained its ultra-loose strategy.
— CNBC’s Shreyashi Sanyal contributed to this story.
