Intervention action taken as excess volatility not desirable

Japanese Finance Minister Shunichi Suzuki said on Friday that he will conduct interventions in response to sudden currency movements.

Key quotes

Sees lingering deflationary pressures.

Warns of risk of deflation returning.

Warns against sudden movements in the foreign exchange market.

Weak Yen has pros and cons.

Japan has taken action, including FX intervention, as excessive volatility in forex is not desirable. 

Japan hasn’t fully overcome deflation yet.

There’s a potential risk of Japan’s financial health deterioration from rate hike as government debt is large.

Market reaction

At the time of writing, USD/JPY is trading 0.27% lower on the day at 145.88.