The Japanese government continues to voice concerns about the recent sharp fall of the yen, saying it will monitor the currency market with more urgency while working closely with the Bank of Japan (BOJ).
Chief Cabinet Secretary Hirokazu Matsuno reiterated comments from several policymakers on Thursday, but did not comment on the possibility of intervention in the currency.
The yen fell to a 138.00 low against the U.S. dollar for the first time since September 1998, after annual U.S. consumer prices recorded the biggest increase in 40 years.
The unexpected surge has raised concerns that the Federal Reserve (Fed) will raise interest rates more ‘firmly’ than previously expected, further widening its monetary policy gap with the BOJ.
It is common knowledge that the BOJ still maintains its very loose monetary policy approach even though other major central banks of the world have taken action to raise interest rates.
Worsening the situation in Japan is a new wave of Covid-19 cases that are seen to have spread rapidly nationwide with Tokyo recording 16,878 new cases on Wednesday, the highest since February.
Tokyo is reportedly preparing to raise the Covid-19 alert level to its highest level where Prime Minister Fumio Kishida will announce the matter at 5pm local time today.
