Japan’s Finance Minister, Katsunobu Kato, has heightened the urgency of monitoring currency movements as the yen recently dropped to its lowest level in nearly three months against the U.S. dollar. During a press conference following the Group of 20 finance ministers and central bank governors meetings in Washington, Kato expressed concerns over the “one-sided, rapid moves” in the foreign exchange markets.
On Wednesday, the yen fell to 153.19 per dollar, the weakest point since July 31. While this level is still considerably above the 38-year low of nearly 162 reached earlier in July, the currency’s sharp decline has reignited speculation regarding potential intervention by Japan’s Ministry of Finance to stabilize the yen.
Market observers are closely monitoring the yen, as its performance could influence the Bank of Japan’s timing for its next interest rate hike. Economists surveyed by Bloomberg anticipate that this rate change could occur in December or January. Many believe that the government may intervene in currency markets if the yen approaches the 160 mark against the dollar.
Following Kato’s comments, the yen saw a slight recovery, trading around 152.40 in Tokyo on Thursday morning.
As Japan approaches its general election on Sunday, alongside the upcoming U.S. presidential election next month, analysts suggest that authorities may adopt a cautious stance regarding any substantial actions in the currency markets until these significant political events unfold.
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