Japan is monitoring foreign exchange moves with a sense of urgency and will consider timely action if the yen's moves become volatile, its top currency diplomat said Wednesday after the yen hit a fresh 10-month low against the U.S. dollar overnight.

A financial data screen in Tokyo shows the U.S. dollar trading in the upper 147 yen range in the early morning on Sept. 6, 2023. (Kyodo) 

"We could see speculative moves (in the forex market) and we are closely monitoring the situation, with a high sense of urgency," Masato Kanda, vice finance minister for international affairs, told reporters at the Finance Ministry.

"If such moves continue, the government will take appropriate measures, and all options are on the table," Kanda added.

The yen briefly weakened to the 147.80 level against the dollar on the New York market Wednesday, hitting its lowest level since early November, as market participants sold the Japanese currency for the dollar amid speculation that the U.S. Federal Reserve will continue its aggressive interest rate hikes.

"Sharp market swings are happening," Kanda said, while also warning about the potential for a negative impact on households, such as through a rise in gasoline prices.

Japanese authorities repeatedly issue verbal warnings before they intervene in the currency market. The last time Japan conducted a yen-buying, dollar-selling intervention to arrest the Japanese currency's decline was in October.

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