Japan Has "Free Hand" over Forex Intervention: Finance Min. Katayama

Tokyo, Dec. 23 (Jiji Press)--The Japanese government has a "free hand" over whether to intervene into the foreign exchange market to stem the yen's recent rapid depreciation, Finance Minister Satsuki Katayama said Tuesday.

Katayama told a news conference that the government will act against "speculative and excessive moves," based on a September joint statement released by then Japanese Finance Minister Katsunobu Kato and U.S. Treasury Secretary Scott Bessent. The document said, among other things, that "excess volatility and disorderly movements in exchange rates can have adverse implications for economic and financial stability."

The yen remains weak even after the Bank of Japan's decision on an interest rate hike Friday. On this, she said: "I think it doesn't reflect economic fundamentals at all. It is speculative activity."

On rising Japanese long-term interest rates reflecting caution over Prime Minister Sanae Takaichi's aggressive fiscal policy, Katayama said, "We are managing fiscal policy while maintaining sustainable finances."

She dismissed claims that the Takaichi government's fiscal policy is lax.

[Copyright The Jiji Press, Ltd.]