Yoshinobu Tsutsui, who heads Keidanren, Japan's largest business lobby, said on Tuesday that currency market intervention is appropriate when the goal is to stop rapid shifts in the value of the yen.
Asked about the yen's rebound following rate checks conducted by the New York Federal Reserve, Tsutsui said he welcomed "the fact that the demerits caused by excessive yen weakness have been arrested to some extent," telling reporters at a news conference that the recent pause in yen weakness was a positive development.
Tsutsui emphasized that the future trajectory of the yen will be tied to the stance of monetary policy in both Japan and the United States. "We hope the Bank of Japan would respond appropriately on this front," he said, without providing further detail on what an appropriate BOJ response would entail.
Returning to the topic of direct market action, Tsutsui said: "If there are rapid, volatile yen moves, then intervention would be justified." His comments tied the acceptability of intervention specifically to episodes of swift and disorderly FX market behavior rather than to gradual trends.
The remarks reflect the position of Keidanren's leadership on conditions under which authorities should consider stepping into the currency market. Tsutsui framed intervention as a tool to be used when the yen experiences abrupt volatility that could cause significant harm, and he linked the currency's near-term path to decisions made by central banks in Tokyo and Washington.
Tsutsui's statements provide a clear delineation of when intervention would have his endorsement: when moves in the yen are rapid and volatile and when such action is intended to arrest those moves. Beyond that, he indicated reliance on the Bank of Japan to take appropriate measures related to monetary policy but did not specify particular steps or timing.
Context provided in the remarks:
- Keidanren's leader welcomed a partial arrest in the adverse effects tied to excessive yen weakness.
- He noted the yen's rebound came after the New York Federal Reserve conducted so-called rate checks.
- Tsutsui linked future yen movement to the direction of Japanese and U.S. monetary policy and called for an appropriate BOJ response.