Japan on Thursday stepped into the foreign exchange market amid the yen's abrupt fall, the Finance Ministry said, in its first intervention to prop up the currency in 24 years, as rising import costs have been dragging down the country's broader economy.

The surprise market operation comes as Prime Minister Fumio Kishida has been urged to take measures to alleviate the negative impact of price hikes hurting the household and corporate sectors, with his Cabinet's public approval rating decreasing recently.

Later Thursday, Finance Minister Shunichi Suzuki said at a press conference that the government intervened in the foreign exchange market on the same day in a bid to stem volatile market moves, although he did not elaborate on the exact timing of the operation.

Suzuki was also mum about whether Japan unilaterally stepped into the currency market, while emphasizing that the government of the world's third-biggest economy has been making efforts to obtain understanding from other nations about the intervention.

A currency monitor on Sept. 22, 2022, in Tokyo shows the dollar slipping below 143 yen in an initial response to Japan's first yen-buying intervention since 1998 to stem the Japanese currency's further fall as it sank to a fresh 24-year low in the 145 range against the dollar. (Kyodo) ==Kyodo

The yen-buying operation "has had a certain effect," Suzuki said. He pledged that the government will "keep close communication" with the Bank of Japan to "implement appropriate policies" to curb foreign exchange market fluctuations.

Kishida said at a news conference in New York on Thursday after attending the U.N. General Assembly that Japan will "continue to take decisive steps against excessive currency moves," suggesting Tokyo might intervene in the market again if necessary.

Before Suzuki's announcement, Masato Kanda, Japan's top currency diplomat, told reporters, "We took a decisive step" as speculative moves have been seen in the market, adding, "We will continue to watch foreign exchange moves with a high sense of urgency."

Earlier in the day, Kanda, a senior Finance Ministry official, said Japan could intervene in the market "anytime" to prevent the yen from plunging further, hours after the currency hit a new 24-year low against the U.S. dollar.

The Bank of Japan, as ordered by the Finance Ministry, is believed to have sold dollar-denominated assets it holds, such as U.S. Treasuries, to buy the yen in the financial market, investors said.

Japanese Finance Minister Shunichi Suzuki speaks at a press conference in Tokyo on Sept. 22, 2022, following Japan's first yen-buying intervention since 1998 to stem the Japanese currency's further fall as it sank to a fresh 24-year low in the 145 range against the dollar. (Kyodo) ==Kyodo

Japan's foreign exchange reserves, mainly composed of securities and deposits denominated in foreign currencies, stood at $1.29 trillion at the end of August, according to official data.

On Thursday, the BOJ maintained its ultralow rate policy as widely expected to shore up the pandemic-hit economy, sticking to a dovish stance despite the yen's sharp decline in a global policy-tightening wave to tackle inflation.

Energy and food prices have been spiking across the world in the wake of Russia's invasion of Ukraine in February.

The U.S. Federal Reserve on Wednesday raised its benchmark policy rate by 0.75 percentage point to combat surging inflation, consolidating the view among market participants that the interest rate gap between the United States and Japan will widen further.

The dollar rose above the 145 yen line in Tokyo trading Thursday, its highest level since 1998, before Kanda made the comments.

The yen-buying operation was carried out after Japanese authorities said all options were on the table in their response to the yen's rapid depreciation.

But many analysts were skeptical about whether Japan could go ahead with a dollar-selling intervention as it would be difficult to get a nod from the United States, which is apparently concerned that the U.S. dollar's slide may push up import costs.

Immediately before Kanda announced later Thursday that Japan intervened in the currency market, the dollar plummeted versus the yen. Some traders, however, said the effects of the intervention might be limited, given the BOJ's drastic monetary easing.

The BOJ's statement released after its two-day policy meeting states the central bank "expects short- and long-term policy interest rates to remain at their present levels or lower."

BOJ Governor Haruhiko Kuroda also indicated at a press conference after the gathering that the bank will not lift interest rates for the next two or three years.

A falling yen is usually a boon for exports as Japanese products become cheaper abroad, increasing the value of overseas revenues in yen terms, but it drives up import prices. Japan depends on imports for more than 90 percent of its energy needs.

Japan's core consumer prices soared 2.8 percent from a year earlier in August to a nearly eight-year high, up for the 12th straight month, government data showed Tuesday, in the latest sign of cost-push inflation without wage growth.

The Japanese government last conducted yen-selling, not yen-buying, intervention in October and November 2011, after the currency hit a postwar high of 75.32 to the dollar. In March of that year, a devastating earthquake struck northeastern Japan.

After Shinzo Abe became Japan's prime minister in December 2012, the yen was on a downward trend against a backdrop of his economic policy, dubbed "Abenomics," including aggressive monetary easing, massive fiscal spending and growth strategy.

On Thursday, Japan intervened in the market to buy the yen for the first time since 1998, when the country's economy experienced a slump after the consumption tax was raised to 5 percent from 3 percent the previous year.

Related coverage:

Bank of Japan maintains ultralow rate policy despite sharp yen slide