Japan to respond strongly to excessive yen fluctuations

On Tuesday, Japan's Finance Minister Shunichi Suzuki warned that Japan would take appropriate and strong action against excessive currency fluctuations caused by currency speculators.

Speaking in Parliament, Shunichi Suzuki pointed to Japan's exchange rate intervention. “We are closely monitoring market movements and will respond strongly to excessive movements in the yen,” said the head of the Japanese Ministry of Finance.

On Tuesday, the yen fell against 149.10 to the dollar, its weakest since August 1990.

Policymakers who previously focused on the strength of the yen as a source of concern for a trade-oriented economy are now concerned that a sharp fall in the yen will increase high-cost merchandise imports.

As the Fed's interest rate hike boosted US currency, Japanese authorities have warned of an almost daily decline in the yen since early September. Back in September, the yen hit 144 to the US dollar.

At the parliamentary session on Tuesday, Prime Minister Fumio Kishida warned of the problem of rapid currency fluctuations caused by speculation.

Kishida brushed aside prevailing market sentiment that the sharp fall in the yen was largely driven by the Bank of Japan's ultra-easy monetary policy. The Prime Minister of Japan also said that exchange rates are changing not only due to the difference in interest rates between the US and Japan, but also under the influence of other factors.

Fumio Kishida also added that the Bank of Japan determines monetary policy based not only on currency movements, but also on complex factors such as economic and price developments.

According to the head of the Bank of Japan, Haruhiko Kuroda, there is a possibility that the strength of the dollar will not be maintained.

"The dollar became extremely strong against all the currencies of the world, but few people in Washington thought it would last," Kuroda said.