Japan is ready to respond "resolutely" to volatile yen movements after its recent currency intervention "served as a warning" to speculators behind the currency's rapid depreciation, Finance Minister Shunichi Suzuki said Monday.
Japan spent 2.84 trillion yen ($19 billion) in its first yen-buying, dollar-selling intervention since 1998 on Sept. 22, causing the U.S. dollar to fall by 5 yen, albeit temporarily. The dollar has returned to levels near the 145 yen line as the currency is broadly strong amid the prospect of further rate hikes by the Federal Reserve.
"Speculators were behind the rapid, one-sided movements. We carried out intervention the other day and we have been saying that we will take action resolutely if needed," Suzuki said at a press conference. "There is no doubt that this has served as a warning to speculators."
The dollar was trading in the upper 144 yen zone on Monday.
Higher energy and raw material costs are a headwind for resource-scarce Japan, with the yen's slump to its lowest level in 24 years amplifying the impact.
Suzuki reiterated that currency moves should be stable, adding that the government is monitoring market developments with "a sense of heightened vigilance."
