TOKYO (Reuters) - A senior official from Japan’s Ministry of Finance said on Wednesday that volatility remained high in the foreign exchange market and rapid yen swings - whether up or down - were undesirable.
The dollar rose 2.7% against the yen to 105.10 JPY=EBS on Tuesday, considerably higher than Monday's 101.18 low, as investors hoped global monetary policymakers will launch further stimulus plans to ease the economic impact of the coronavirus outbreak.
“Stability in currencies as well as the stock market is most important. We need to keep close watch for a bit more,” the official told reporters.
“We are not just focusing on one-direction (of the yen moves). It’s important to monitor the speed in both directions.”
On Monday, Japanese policymakers reitereated warnings against a yen spike, fearing the rapid yen appreciation could undermine competitiveness of Japanese shipments overseas and damage Japan’s export-led economy, which is teetering on the edge of recession.
Japan on Tuesday announced a second package of measures worth about $4 billion in spending to cope with the fallout to the economy of the coronavirus outbreak, focusing on support for small and mid-sized firms.
The official, who declined to be named, said “it’s very positive” that the U.S. stock market rebounded as the market reacted favorably to U.S. President Donald Trump’s economic measures in response to the coronavirus.
Reporting by Tetsushi Kajimoto; Editing by Chris Gallagher and Lincoln Feast.