DRESDEN, Germany (Reuters) - Japanese Finance Minister Taro Aso on Thursday fired a verbal warning shot against the yen’s slide, saying that the decline in recent days had been “rough” and he would monitor foreign exchange markets carefully.
The dollar climbed to a 12-1/2-year high against the yen earlier on Thursday as investors bet that U.S. interest rates would rise later this year while Japanese monetary policy remains ultra-loose.
“The current yen weakening in the past few days has been rough. I will closely monitor market moves,” Aso told reporters on the sidelines of a gathering of finance ministers and central bank chiefs of the Group of Seven countries in Germany.
The remark was stronger than recent mild warnings by Japanese policymakers against excess currency turbulence, cautioning markets against pushing the yen down too rapidly.
Japan’s export-reliant economy has historically suffered from a strong yen, so many policymakers have welcomed limited yen declines.
But some have begun to worry about the drawbacks, such as boosting import costs and eroding consumers’ purchasing power, which could outweigh benefits to exporters.
Aso said G7 finance leaders did not discuss currencies at Thursday’s gathering.
But Aso said he had reaffirmed the G7/G20 commitment on currencies when meeting U.S. Treasury Secretary Jack Lew.
G7 and G20 major economies are committed to market-determined exchange rates.
Japan last intervened in the markets in November 2011, to stem a strengthening yen. It last bought the yen to arrest its decline versus the dollar in the late 1990s, when the country was grappling with the Asian financial crisis and its own banking crisis.
Writing by William Schomberg and Tetsushi Kajimoto; Editing by Andrew Roche