As intervention threat grows, Japan says FX speculators dealt with 'strictly'

TOKYO (Reuters) -Japanese Finance Minister Shunichi Suzuki said on Friday that authorities were dealing with currency speculators “strictly”, as an extended sell-off of the yen kept markets on heightened alert for further dollar-selling intervention by Tokyo.

Japan’s Finance Minister Shunichi Suzuki speaks to media at Finance Ministry in Tokyo, Japan October 20, 2022, in this photo taken by Kyodo. Kyodo/via REUTERS

“We are confronting speculators strictly,” Suzuki told a regular news conference, when asked whether the Japanese yen was under attack by speculators. “It’s inappropriate for me to comment on such a question under the current circumstances.”

Suzuki was speaking as the dollar strengthened to 150.29 yen overnight, the highest since August 1990, after breaking the key psychological level of 150 on Thursday.

The dollar has surged around 30% against the yen this year, despite Japan spending up to a record 2.8 trillion yen ($19.7 billion) intervening in the foreign exchange market in September to support its currency for the first time since 1998.

A weak yen has both positive and negative impacts on the world’s third-largest economy, Suzuki said, but added that the recent sharp and one-sided weakening in the currency was undesirable.

Tokyo is set to compile an economic package of measures by the end of this month to ease the pain of surging costs of energy and food, stoking concerns that another round of heavy spending could strain Japan’s already dire public finances.

Suzuki underscored the importance of maintaining trust in Japan’s finances, after Britain was plunged into financial crisis in the wake of a violent market reaction to plans for huge unfunded tax cuts, forcing its premier to resign after just six weeks in office.

“It’s not that Japan’s finances are undergoing a major shift in phase leading to the current yen weakening,” Suzuki said, when asked if there were lessons for Japan from Britain’s predicament that led to the resignation of Prime Minister Liz Truss.

On the course of future monetary policy, Suzuki said it is up to the BOJ to decide.

“I’m not in a position to comment anything concrete,” he said. “We’ll strive to maintain fiscal discipline with a major target of achieving primary budget surplus in fiscal 2025.”

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