Japan is ready to respond "appropriately" to excessive volatility in the currency market, with all options on the table, Finance Minister Shunichi Suzuki said Friday, following the yen's recent depreciation.
Suzuki said currency movements should be stable and reflect economic fundamentals, reiterating the government's stance. His fresh verbal warning immediately sent the yen climbing against the U.S. dollar, in an apparent sign of market nervousness over the possibility of another currency market intervention by Japanese authorities.
"The government is closely monitoring developments in the currency market with a heightened sense of urgency," Suzuki said. "We will take appropriate action to counter excessive volatility without excluding any options."
The yen has already slipped past the levels at which Japan previously intervened to stem its precipitous fall last year. Suzuki has said the government is paying attention to volatility, dismissing the view that it has specific levels in mind when it comes to intervention.
The dollar fell into the 146 yen zone on Suzuki's remarks before moving back into the 147 yen range.
The yen is seen as less attractive than the dollar due to a policy divergence between the Bank of Japan and the Federal Reserve.
While the BOJ has not budged on its stance of persisting with monetary easing, it has begun to allow 10-year Japanese bond yields to rise more.
The Fed is far ahead of the BOJ, having raised interest rates aggressively. Its chief Jerome Powell has not ruled out more hikes to tamp down inflation.