Tokyo sidesteps intervention questions after dollar tops 150 yen

TOKYO

Japan's top currency officials would not comment yesterday on whether Tokyo had intervened to support the yen after it slid to its weakest level in a year.

In mid-afternoon trading in London, the dollar/yen rate hit 150.16, its cheapest since October 2022, before quickly bouncing back.

In Tokyo morning hours, the dollar fetched 149.1 yen, against 148.85 yen in New York late on Oct. 3.

The yen's weakening reflects a mix of ultra-loose monetary policy in Japan coupled with rising U.S. interest rates that are attracting investors to the dollar.

Analysts had speculated that the yen's decline could prompt the Bank of Japan to prop up its currency, since weakness increases the cost of imports such as food and energy.

"I don't answer questions of whether we intervened or not," finance minister Shunichi Suzuki told reporters.

"We would take necessary measures to excessive [currency] movement without excluding any [policy options]," he added.

His comments came a few hours after top currency diplomat Masato Kanda declined to say whether his ministry intervened in the exchange-rate market or not.

In September 2022, Japan's finance ministry intervened in the currency market for the first time since 1998 after the yen fell to 146.

It spent around $20 billion followed by another $40 billion in subsequent weeks as the currency dropped beyond 151 per dollar.

In recent months, the yen has plummeted against the dollar in part because of the widening gap in interest rates set by the Bank of Japan and the U.S. Federal Reserve.

Most major central banks, including the Fed, have raised interest rates to tame inflation.

While the Bank of Japan has tweaked its yield curve control scheme for government bonds, it has stuck to sub-zero borrowing costs to support the lacklustre economy.