TOKYO, May 26 (Reuters) – Japanese Finance Minister Shunichi Suzuki on Friday said exchange rates should be set by markets based on economic fundamentals, after the yen fell to a six-month low against the dollar.
“Currency rates should be driven by markets based on fundamentals,” Suzuki said at a news conference after a regular cabinet meeting.
“We will continue to monitor market movements closely.”
The Japanese currency earlier weakened to over 140 yen against the dollar, its lowest level since late November.
Suzuki’s comments were softer than the warnings Japanese authorities usually issue when they see yen movements as overdone, suggesting Tokyo is cautious about the currency’s recent slide for now.
The yen’s overnight depreciation was far less than last year, standing at nearly 152 yen against the dollar, a 32-year low. This prompted monetary authorities to step in, warning that they would take decisive action to halt the decline.
While a weak yen buoys Japan’s exporters, it hurts households and retailers by raising the cost of already high commodity imports.
Suzuki declined to comment further on Friday, saying any “imprudent comment” could cause confusion in the forex market.
Reporting by Tetsushi Kajimoto; writing by Leika Kihara; Edited by Shri Navaratnam, Muralikumar Anantharaman and Tom Hogue
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