TOKYO/SEOUL, March 14 (Reuters) – Japan and South Korea expressed concern on Saturday about the rapid declines in their currencies, saying they were ready to act against excessive foreign-exchange volatility.
Finance Ministers Satsuki Katayama of Japan and Koo Yun-cheol of South Korea “expressed serious concern over the recent sharp depreciation of the Korean won and the Japanese yen,” they said in a statement after their annual meeting in Tokyo.
The yen and won have slid as mounting tensions from the U.S.-Israeli war on Iran have driven the dollar higher on safe-haven demand and battered the currencies of countries heavily reliant on imported oil.
“Furthermore, they reaffirmed that they will closely monitor foreign exchange markets and continue to take appropriate actions against excessive volatility and disorderly movements in exchange rates,” the statement said.
The yen touched its lowest in 20 months on Friday and is near the line of 160.00 to the dollar that many in the market think might prompt Japan to intervene to support the currency. The won breached a psychological barrier of 1,500 per dollar this month for the first time since March 2009.
Tokyo and Seoul shared the view that significant volatility had emerged in financial markets, including foreign exchange, Katayama told a press conference after the meeting.
“The Japanese government is fully prepared to respond at any time, bearing in mind the impact that currency moves may have on people’s livelihoods amid surging oil prices, and I believe both sides share that understanding,” she said.
Katayama regularly says Japan is ready to act regarding yen moves, although some policymakers privately say that intervening to prop up the yen now could prove futile, as the flood of dollar demand will only intensify if the war persists.
(Reporting by Jihoon Lee and Jack Kim in Seoul and Makiko Yamazaki in Tokyo; Editing by Tom Hogue and William Mallard)
Comments