Japan’s Finance Chief Will Take The Necessary Steps Forex Volatility Continues To Increase
The Japanese yen is one of three currencies that countries use for their foreign reserves. The other includes the Euro and the US dollar. However, as various sociopolitical issues start to affect various financial markets, countries need to rely on their financial reserves to better preserve their currencies.
With rising inflation rates and an increased cost of most commodities, countries worldwide have collectively spent close to $12 trillion to preserve their currencies. And as many of these countries are starting to make moves to better protect their currencies in the face of rising inflation, the Japanese Finance Chief believes that it is still too early to dedicate certain steps.
The Yen Drops Below the Dollar
As nearly every currency starts to plummet, Japan to has seen its currency weaken against the US dollar. While various factors have made the US dollar much stronger than most currencies right now, currencies like the Yen are also dropping due to rising inflation.
However, most importantly, the levels dropped below a similar point last month, where the authorities had to intervene. The Forex market has become considerably more volatile, with other financial markets becoming almost inhospitable to different investors.
But more importantly, the Japanese government is paying close attention to how the forex market is developing, as it does not want to be hit by the surprise of a sudden drop in the Yen’s price. They are currently, vigilantly watching the market to see if prices for the yen will drop anytime soon. And if there is a sharp drop, the authorities will intervene to stabilize it.
The current state of Japan’s economy is a peculiar one, which is the finance chief will be taking out time to visit representatives from various other economies in Washington.
Meeting 20 Other Finance Chiefs in Washington
Shunichi Suzuki, the Finance Chief of Japan, will be heading out to Washington during the week to meet with other finance chiefs from 20 other economies. Before he would make preparations for the conference, he has also been very vocal about Japan’s stance on how it will be dealing with the current currency crises.
According to the statement that he gave, his office is closely monitoring the Forex market, and will take appropriate steps when it feels is necessary. More specifically, they will make their move if the currency market becomes more volatile.
Few Words to Improve investor Sentiment
The Japanese finance chief said very little in the way that could improve investor sentiment throughout the market. Instead, reports are stating that he will offer a much more detailed report when he is back from meeting the other finance chiefs from different countries.