by Tetsushi Kajimoto
TOKYO, March 27 (Reuters) – Japan’s three main monetary authorities held an emergency meeting on Wednesday to discuss the weak yen, suggesting they were ready to intervene in the market to end their described as disorderly and speculative movements in the currency.
The Bank of Japan (BoJ), the Ministry of Finance and the Financial Services Agency of Japan held the meeting late in the afternoon in Tokyo, after the currency fell earlier on Wednesday to its lowest level in 34 years at 151.97 yen per dollar, located in the zone that triggered the intervention of the Japanese authorities in 2022.
At 11:11 a.m., the Japanese currency recovered slightly and rose 0.3% to 151.09 yen per dollar.
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Masato Kanda, a diplomat in charge of currencies, said in a briefing after the meeting that he “does not rule out any measures to respond to disorderly movements in the foreign exchange market.”
He also said the BOJ would respond through monetary policy if currency movements affected the economy and price trends.
The yen continues to lose ground despite the BOJ abandoning negative interest rates last week.
A weaker currency makes Japanese imports more expensive, fueling inflation, while export prices become cheaper.
Earlier in the day, Finance Minister Shunichi Suzuki said authorities could take “decisive action” against the weak yen – language he had not used since 2022, when he last spoke of Japan on the market.
Although the BoJ raised rates last week for the first time since 2007, markets believe the next hike may not come for some time, reinforcing the use of the yen in so-called “carry” operations, in in which investors borrow in a low-interest currency and invest the proceeds in a higher-yielding one.
Over the quarter, the yen fell by more than 7% against the dollar. (Reporting by Tetsushi Kajimoto in Tokyo, with contributions from Rae Wee and Tom Westbrook in Singapore, writing by Lincoln Feast; French version Diana Mandiá, editing by Kate Entringer)
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