Japan Finance Minister Calls Currency Market Activity ‘Rapid’ and ‘One‑Sided’< /TITLE>

Japan’s Ministry of Finance said the yen’s recent trading pattern has been “rapid” and “one‑sided,” indicating a pronounced one‑way momentum in the foreign‑exchange market.

Speaking at a briefing on August 14, 2024, Finance Minister Koki Hojo noted that heightened volatility stems from divergent monetary policies between Japan and the United States, compounded by fluctuating risk‑sentiment indices.

The minister pointed out that the yen’s decline against the dollar and euro over the past week has been swift, with a steep percentage‑point swing that has tested the effectiveness of current intervention measures.

“We are monitoring the situation closely,” Hojo said. “The aim is to stabilize the currency while preserving economic growth objectives. In the medium term, we will reassess our policy tools based on international developments.”

Market analysts expect the government to consider a modest tightening of domestic rates if sustained weakness persists, but Hojo warned that any further moves could trigger a “one‑sided” market reaction that accelerates rate differentials.

By the end of the week, the finance ministry will release a detailed analysis of the underlying macro factors and outline potential policy adjustments.