CNA – Top officials from the Ministry of Finance, Bank of Japan and the financial watchdog met yesterday to discuss financial markets, the ministry said, after the Japanese currency weakened to a six-month low versus the dollar.
The three-party talks are held routinely to signal the authorities’ determination to keep market moves in check particularly when volatility is high.
Such talks were last held in mid March and tend to take place when the yen suffers sharp swings, either up or down.
Top currency official and vice finance minister for international affairs Masato Kanda briefed the media after the talks that start at 0830 GMT, the ministry said.
The three-way talks were used last year to warn against excessive weakening of the Japanese currency, which drives up import costs and deals a blow to private consumption that makes up more than half the economy, the world’s third largest.
A meeting last year served as a prelude to Japan’s first dollar-selling and yen-buying intervention in 24 years, as the yen depreciated to a near 32-year low against the United States (US) currency.
Usually, a strong yen tends to be a matter of concern for policymakers, due to the export-reliant nature of the Japanese economy, as this would undermine export-price competitiveness. Recently yen weakness has been a greater concern.
A weak yen has driven up import bills, sending Japan’s trade balance into persistent deficit and undermining Japan’s purchasing power.
There have been recent concerns about a renewed weakening in the yen, which has hovered close to a six-month low beyond JPY140 to the dollar since last Friday.
The greenback dropped 0.03 per cent against the yen yesterday to 140.4, just below the year’s high of 140.91 hit on Monday.
Helping boost the dollar, longer-dated US Treasuries rallied yesterday as bond traders welcomed a deal to suspend Washington’s borrowing limit until January 2025 in exchange for caps on spending and cuts in government programmes.
