By Tetsushi Kajimoto
TOKYO (Reuters) – Japan’s finance minister said on Friday authorities were “firmly watching” currency market moves, after Federal Reserve Chair Jerome Powell’s comment hinting of an end to rate hikes may have prompted a spike in the yen against the dollar.
“I know there are various market talk but the finance ministry won’t comment on any of them,” Shunichi Suzuki told reporters, when asked about Powell’s comment.
Powell said on Wednesday the question of when it will be appropriate to cut rates is coming into view. His remarks came after the Fed’s latest policy meeting, alongside which the central bank issued forecasts showing policymakers see rates dropping by the end of 2024.
“I won’t comment on every single day-to-day currency market move,” Suzuki added. “Our basic stance is that it is desirable for currencies to move stably reflecting fundamentals.”
The yen spiked on Thursday following the dollar’s tumble, climbing to its highest since July 31 at 140.95 per dollar. It was last traded just above 142 yen to the dollar.
Expectations that the Bank of Japan (BOJ) could end negative interest rates in the coming months have driven up the Japanese currency lately, particularly after Governor Kazuo Ueda said it would be even more challenging.
Ueda’s comment was interpreted as the central bank may struggle to normalise easing policy at a time when the Fed could end its aggressive rate hikes implemented to fight inflation.
(Reporting by Tetsushi Kajimoto; Editing by Jacqueline Wong)