Yellen sees yen’s depreciation, says intervention only warranted in ‘rare’ cases
By Andrea Shalal
TOKYO (Reuters) -U.S. Treasury Secretary Janet Yellen on Tuesday acknowledged the Japanese yen’s substantial depreciation in current weeks, however mentioned the U.S. view remained that foreign money intervention was warranted solely in “uncommon and distinctive circumstances.”
Yellen advised reporters after separate conferences with Japanese Finance Minister Shunichi Suzuki and Financial institution of Japan Governor Haruhiko Kuroda that that they had reviewed the yen’s depreciation, however didn’t talk about intervention or associated coverage.
Yellen and Suzuki pledged in a joint assertion after their greater than hour-long dialogue to proceed to seek the advice of intently on international alternate markets and “cooperate as applicable” on foreign money points, according to their commitments as a part of the Group of Seven and Group of 20 economies.
The greenback slid towards the yen to face round 136.89 on Tuesday, after touching a recent 24-year excessive of 137.75 on Monday.
Suzuki advised reporters that he shared with Yellen Japan’s considerations in regards to the yen’s sharp weakening and she or he listened earnestly.
Yellen advised reporters that Washington remained satisfied that nations reminiscent of Japan, the USA and different members of the Group of Seven wealthy nations ought to have market-determined alternate charges and intervention was warranted “solely in uncommon and distinctive circumstances.”
Yellen mentioned she reiterated that place throughout her conferences with the Japanese officers, and that G7, G20 commitments concerned “speaking intently about alternate price developments.”
Requested if the yen’s depreciation was as a consequence of Russia’s conflict in Ukraine and its fallout on the worldwide financial system, or extra as a consequence of macroeconomic elements, Yellen famous that Japan continued to have “yield curve management and nil rate of interest coverage” at a time when the Federal Reserve was tightening financial coverage.
Consequently, rate of interest differentials – which tended to systematically strengthen the greenback and weaken different currencies – had turn into “fairly massive,” she mentioned, though the yen’s losses had outstripped what one may count on primarily based on the hole.
There was, she famous, “hypothesis out there” as properly.
(Reporting by Andrea Shalal; Further reporting by Leika Kihara; Enhancing by Louise Heavens and Susan Fenton)
