MARRAKECH, Morocco, Oct 14 (Reuters) – The yen’s recent
declines are driven by fundamentals and do not meet any of the
considerations that would call for authorities to intervene in
the currency market, a senior International Monetary Fund
official said on Saturday.
“On the yen, our sense is that the exchange rate is driven
pretty much by fundamentals. As long as interest rate
differentials remain, the yen will continue to face pressure,”
Sanjaya Panth, deputy director of the IMF’s Asia and Pacific
Department, told reporters.
Authorities in Japan are facing renewed pressure to combat a
sustained depreciation in the yen, as investors bet on
higher-for-longer U.S. interest rates while the Bank of Japan
remains wedded to its super low interest rate policy.
The IMF sees foreign exchange intervention as justified only
when there is a severe dysfunction in the market, a heightening
of financial stability risks, or a de-anchoring of inflation
expectations, Panth said.
“I don’t think any of the three considerations are existing
right now,” he said, when asked whether recent yen falls call
for authorities to intervene in the currency market.
Japan bought yen in September and October last year, its
first foray in the market to boost the currency since 1998, to
stem sharp declines that eventually pushed the yen to a 32-year
low of 151.94 to the dollar.
The dollar fetched 149.57 yen on Friday.
(Reporting by Leika Kihara; Editing by Emelia Sithole-Matarise
and Mike Harrison)
