By Tetsushi Kajimoto
TOKYO (Reuters) – Japan’s top currency diplomat Masato Kanda warned about the yen’s significant weakening overnight following U.S. inflation data, saying he was “concerned” about the currency moves.
“We are monitoring yen moves with a sense of urgency,” Kanda, Japan’s vice finance minister for international affairs, told reporters.
“We will respond appropriately to currency moves without ruling out any options.”
The dollar jumped against the yen as well as euro and other currencies on Tuesday after stronger-than-expected U.S. inflation data suggested the Federal Reserve may need to stay aggressive in raising interest rates.
The dollar was last trading at around 144.44.
The yen has lost about 20% in value versus the dollar since the start of this year.
The Japanese currency hit a fresh 24-year low just shy of 145 yen last week, fuelling worries on higher living costs, prompting policymakers to jawbone investors against yen-selling.
However, many market players say Japanese policymakers have few effective tools to correct the weak yen, which is seen as being caused by the diverging monetary policy between Japan and the United States.
While the U.S. Federal Reserve is raising interest rates to fight inflation, the Bank of Japan has stuck to powerful monetary easing to support a fragile economy.
(Reporting by Tetsushi Kajimoto; Editing by Tom Hogue and Muralikumar Anantharaman)
