Japan’s top currency diplomat, Masato Kanda, has issued strong warnings regarding the yen’s recent weakening. He described the decline as “rapid and one-sided” and emphasized that Japan is considering all available options to respond appropriately.
The yen has experienced a significant drop against the US dollar in recent months, reaching a 20-year low of 135.50 yen per dollar on Monday. This decline has raised concerns in Japan, as it can lead to increased costs for imports and potentially harm the country’s exports.
Kanda stated that Japan will closely monitor the currency market and take necessary measures if needed. However, he did not specify the exact actions that might be taken, which could range from intervening in the currency market by buying yen to raising interest rates.
The Bank of Japan has resisted calls to raise interest rates thus far, citing potential negative impacts on the economy. However, the weakening yen has increased pressure on the BoJ to reconsider its stance and take action.
It remains uncertain whether Japan will intervene in the currency market or opt for interest rate adjustments. Nonetheless, Kanda’s remarks indicate that the government is growing increasingly concerned about the yen’s decline.
