TOKYO (Reuters) – Japanese Finance Minister Taro Aso said on Tuesday he was monitoring currency moves “with a sense of urgency” after a recent spike in the yen, using a phrase suggesting policymakers’ concern about excessive volatility.
While declining to comment on specific foreign exchange levels, Aso underscored the importance of stability in the Japanese currency, which tends to be perceived as a safe-haven asset attracting demand when global markets are volatile.
Japanese policymakers tend to try to talk down the yen to prevent it from strengthening, which can undermine export competitiveness and hurt Japan’s export-reliant economy.
“Currency stability is important. We must closely watch the currency market moves with a sense of urgency,” Aso said.
Aso made the comments at a regular news conference when asked about the Japanese currency’s appreciation to a seven-month peak below 105 yen to the dollar on Monday, caused by worries over the Sino-U.S. trade war.
At 0300 GMT, the yen was trading at 105.74 yen to the dollar.
Aso also said recent market volatility would not alter the government position of proceeding with October’s scheduled sales tax hike to 10% from 8%, barring a big economic shock.
Japan’s government has stayed away from the currency market since 2011 when it intervened heavily to stem excessive yen gains versus the dollar in the wake of Fukushima nuclear crisis triggered by a massive earthquake and tsunami.
(Reporting by Tetsushi Kajimoto; Editing by Chang-Ran Kim and Richard Borsuk)