Japan top currency diplomat Kanda says yen weakness doesn’t reflect fundamentals

TOKYO, March 25 – Japan’s top currency diplomat said on Monday that the yen’s current weakness did not reflect fundamentals, in the latest warning about the yen’s “big slide” against the dollar.

“Looking at currencies, the dollar/yen has gone through big fluctuations of 4% over only the past two weeks,” Masato Kanda, the vice finance minister for international affairs, told reporters.

“It has not reflected fundamentals and I feel something strange about it.”

Kanda described the recent yen moves as “speculative.” He said he wouldn’t rule out any measures but stands ready to respond appropriately to the currency’s move which could deal a blow to people’s livelihoods through higher costs of imports.

He added that yen weakness has a negative effect on the economy, adding that he doesn’t have a specific exchange level in mind when asked about defense lines. He has said he has been closely watching currency moves with a sense of urgency.

Japan last intervened in the currency market in October 2022 by heavily buying the yen and selling the dollar when the yen weakening accelerated towards a 32-year-low near 152 yen to the dollar.

It was trading around 151.27 early on Monday morning.

(Reporting by Tetsushi Kajimoto; Writing by Rocky Swift; Editing by Kim Coghill and Chang-Ran Kim)