January 29, 2018 / 11:55 AM / 10 months ago

Japan MOF sees forex volatility has risen, watching for speculative moves

FILE PHOTO: Japan Yen and U.S. Dollar notes are seen in this June 22, 2017 illustration photo. REUTERS/Thomas White/Illustration/File Photo

TOKYO (Reuters) - Japan’s top currency official said on Monday that volatility had heightened in the currency market over the last week and that he would keep close watch to see if any speculative moves may be behind it.

Masatsugu Asakawa, vice finance minister for international affairs, was speaking to reporters after he held a routine meeting with officials from the Bank of Japan and the Financial Services Agency to discuss financial markets.

On Friday, the dollar hit a 4-1/2-month low of 108.28 yen JPY= after comments from BOJ Governor Haruhiko Kuroda that the central bank is finally close to the inflation target sparked expectation of an exit from its massive stimulus.

The yen later on Friday pared gains after a BOJ spokesman said Kuroda was merely repeating the central bank’s official view. The currency’s move indicated how sensitive the market is to the slightest hint the BOJ is on the cusp of unwinding its stimulus.

After Monday’s meeting, Asakawa said “We reaffirmed the G7/G20 agreement that we stand against competitive currency devaluation and are not targeting currencies for the sake of competition, and excess volatility and disorderly moves would hurt the economy.”

“We shared the BOJ’s view that as Kuroda stated clearly in Davos it will continue with monetary easing to achieve its 2 percent price stability target,” he said.

Asakawa added that Group of 20 finance leaders were likely to discuss cryptocurrencies when they meet in Buenos Aires in March.

“This issue will probably be on agenda in Argentina, so Japan is preparing so as to respond appropriately,” he said. “Given that various people are talking about this subject, the chance will be high.”

Reporting by Tetsushi Kajimoto; Editing by Richard Borsuk

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