Intervention action taken as excess volatility is not desirable

Japanese Finance Minister Shunichi Suzuki said on Friday that he would intervene in response to the currency’s sharp moves.

Key quotes

He sees persistent deflationary pressures.

It warns of the risk of deflation returning.

It warns against sudden movements in the forex market.

The weak yen has pros and cons.

Japan has taken measures, including currency intervention, because excessive forex volatility is undesirable.

Japan has not yet fully overcome deflation.

There is a potential risk of deterioration in Japan’s financial health due to rate hikes as government debt is high.

Market reaction

At the time of writing, USD/JPY is trading 0.27% lower on the day at 145.88.