This is an AI translated post.
Finance Minister Shindo's Warning on the High Volatility of the Exchange Rate Market
- Writing language: Korean
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Base country: Japan
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- Economy
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Summarized by durumis AI
- Japanese Finance Minister Masato Shindo expressed concerns about the recent volatility in the foreign exchange market, warning of appropriate government responses in the event of excessive exchange rate fluctuations.
- He particularly expressed concerns about the sharp decline in the yen's value, suggesting the possibility of government intervention if the market does not function healthily.
- The Japanese government is expected to seek ways to stabilize the exchange rate in close cooperation with major countries such as the United States, as it is concerned about rising prices and widening trade deficits due to the yen's depreciation.
On May 7, Japanese Finance Minister Shunichi Suzuki expressed concern over the recent high volatility in the foreign exchange market. He warned that "if the exchange rate fluctuates excessively beyond the economic fundamentals due to speculation or other reasons, the government should take appropriate measures." This statement is interpreted as being directed at the recent large fluctuations in the value of the yen.
Image source: GPT4.0
On April 29 and May 2, the yen depreciated sharply, leading to speculation that the Japanese government and the central bank had intervened in the foreign exchange market. Unlike September 2022, when the Japanese government intervened to buy yen for the first time in 24 years and made it public, this time the government has not officially confirmed its intervention.
Finance Minister Suzuki stated, "Generally, exchange rates should move steadily, reflecting the underlying economic conditions. If the market functions properly, there is no need for government intervention." However, he added, "If the market moves disorderly, the government should respond appropriately."
At the ASEAN+3 Finance Ministers' Meeting held in Tbilisi, Georgia last week, "many countries expressed serious concerns about current exchange rates and other issues," highlighting that the current situation is not just a Japanese problem.
Amid the rapid yen depreciation, Japan is also watching the possibility of early interest rate hikes in the United States. While noting that "it is inappropriate to comment on monetary policy," Finance Minister Suzuki said, "Japan is in close communication with central banks in various countries, including the Bank of Japan."
The Japanese government is concerned about the negative consequences of the continued yen depreciation, such as rising price pressures and widening trade deficits. Therefore, it is sending signals that it will actively intervene in the market if necessary. Experts expect Japan to seek ways to stabilize exchange rates through close coordination with major countries like the United States.
