The vice minister cautioned against the yen's rapid depreciation. With expectations of a US rate hike growing, attention has focused on a widening Japan-US interest-rate differential, heightening vigilance over foreign-exchange intervention.
The US dollar traded in the upper ¥159 range in the Tokyo foreign-exchange market on the 12th. Regarding the yen's depreciation against the US dollar, Mimura Atsushi (三村 淳), the Ministry of Finance's Vice Minister of Finance for International Affairs, said that "the moves over the past few days have been too fast," cautioning the market against excessive moves. Market vigilance over foreign-exchange intervention by the government and the Bank of Japan has intensified.
The month-on-month increase in the US Consumer Price Index (CPI) announced on the 10th exceeded market expectations, strengthening views that the US Federal Reserve Board (FRB) could raise interest rates in December. Attention has focused on a further widening of the Japan-US interest-rate differential, leading to stronger selling of the yen and buying of the US dollar.
Mimura responded to reporters on the morning of the 12th and, with the coordinated Japan-US intervention at the end of July in mind, stressed that "it is still too early to forget the memories of summer." Meanwhile, on the 12th, Bank of Japan Policy Board member Asada Toichiro (浅田 統一郎) said in a speech in Nagasaki that "it is necessary to pay attention to the risk that an interest-rate hike could weaken the economy and lead to a decline in the underlying inflation rate," expressing concern over an economic slowdown.