By Tetsushi Kajimoto
TOKYO (Reuters) – Japanese Finance Minister Taro Aso issued a fresh warning against renewed strength in the yen, saying that he would “firmly respond” if rapid and speculative moves persisted in the foreign exchange market. Aso also said he would closely watch Britain’s referendum next week on exiting the European Union, given its potential to disrupt global financial markets.
The yen hovered near Monday’s six-week high of 105.735 against the U.S. currency Japanese officials are worried about a potential spike in the yen, which is perceived as a safe-haven currency during times of heightened risk aversion, in the event of “Brexit”.
Asked about a rising yen, Aso said rapid moves are undesirable and stability in the currency is of the utmost importance.
He declined to comment on currency levels, but added currency market moves had at one point recently been rapid and speculative.
“We must keep close watch with a sense of urgency in order to prevent speculative moves from persisting,” Aso told reporters after a cabinet meeting.
“If necessary we will firmly respond (to the market moves) in accordance with the G7 and G20 agreement,” he added.
G7 leaders reaffirmed last month their stance against competitive currency devaluation, while warning against excess volatility and disorderly moves in the exchange market.
However, U.S. Treasury Secretary Jack Lew earlier this month shrugged off Japan’s concerns over the yen’s strength, describing the recent market moves as “orderly”.
“There are various arguments as to what would correspond to excessive and disorderly currency movements, but I won’t make specific comment on this,” Aso said.
(Reporting by Tetsushi Kajimoto; Editing by Chris Gallagher amd Sam Holmes)
Japan finance minister issues fresh warning on yen rise amid Brexit worries
By Tetsushi Kajimoto
