WASHINGTON (Reuters) – Japanese Finance Minister Shunichi Suzuki said on Friday authorities would take appropriate action against excessive movements in the currency market, repeating his warning to investors against the yen weakening too much.
There is growing market interest in the timing and pace of U.S. and European central banks’ turn toward less restrictive monetary policy, Suzuki said.
“Uncertainty and market speculation around these events have increased volatility in financial markets, including foreign exchange markets,” Suzuki said in a statement to the International Monetary Fund’s steering committee.
“It is important that foreign exchange rates move steadily, reflecting fundamental factors, and excessive volatility is undesirable. We will take appropriate action against excessive movements,” he said during the spring meetings of the International Monetary Fund and the World Bank in Washington.
A broad dollar rally driven by lower market expectations of a near-term cut in US interest rates recently pushed the yen to a 34-year low, raising the prospect of currency intervention by Japanese authorities.
The United States, Japan and South Korea agreed to “consult closely” on currency markets at their first trilateral financial dialogue on Wednesday, acknowledging concerns from Tokyo and Seoul over recent sharp falls in their currencies.