Japan is closely monitoring foreign exchange moves "with a high sense of urgency," Finance Minister Shunichi Suzuki said Thursday after the yen hit a four-month low to the U.S. dollar.
The yen fell to as low as 151.82 overnight in New York amid market expectations that the Bank of Japan will not rush to raise interest rates despite its removal of its negative rate policy.
Suzuki also told reporters that currency moves should be "stable."
The interest gap between Japan and the United States remains wide with the BOJ having stuck to its dovish stance when the U.S. Federal Reserve and other major central banks started to raise interest rates to curb inflation in 2022.
Japanese authorities are on alert against volatility in the foreign exchange market due to its negative impact on the economy. A weak yen inflates import costs for resource-scarce Japan but it also boosts in yen terms the overseas profits Japanese exporters make.
In a parliamentary session on Thursday, BOJ chief Kazuo Ueda reiterated that financial conditions will remain "accommodative," despite the central bank deciding to shift from years of unorthodox monetary policy, including its yield cap program to keep borrowing costs extremely low.
