Press "Enter" to skip to content

China allows a seven-dollar yuan threshold

Japan on Monday warned investors about the yen’s level, letting the threat of intervention on the foreign exchange market hang if the appreciation of the currency undermined its strong export economy.

Yoshiki Takeuchi, Deputy Minister of Finance in charge of international affairs, said Tokyo is in regular contact with the authorities abroad to respond to excessive exchange rate volatility.

“As we have already said, it is necessary to act because of the G7 and G20 agreement if exchange rate fluctuations hurt the economy and the financial markets,” he said. he told reporters who questioned him about the possibility of an intervention.

He was speaking after a meeting of senior officials from the Ministry of Finance, the Bank of Japan, and the Financial Services Agency, which meet periodically to review market developments.

The meeting discussed the market impact of Sino-US trade tensions and the evolution of US monetary policy, Yoshiki Takeuchi said.

“We have been able to confirm that the world economy and the Japanese economy are in a stable situation,” he added.

Asian stock markets continued to fall on Monday, and the Chinese yuan broke the 7.0-for-dollar mark in response to the return of risk aversion, which led to a rush on assets deemed safe like the yen, bonds, and gold.

The Japanese currency thus reached a high of seven months at 105.78 for a dollar.

Tokyo steadily raises the tone when the appreciation of its currency threatens its economy but has not intervened on the market since 2011.

G7 and G20 members have agreed to condemn competitive devaluations and disorderly movements in exchange rates.

Source: Reuters

Comments are closed.