Japan finance minister says markets should set FX rates after yen weakens

TOKYO  –Japanese Finance Minister Shunichi Suzuki said on Friday after the yen fell to a six-month low against the dollar that currency rates should be set by markets based on economic fundamentals.

“Currency rates should be determined by markets based on fundamentals,” Suzuki told a news conference after a regular cabinet meeting.

“We will continue to watch market moves closely.”

The Japanese currency earlier weakened beyond 140 yen to the dollar, its lowest since late November.

Suzuki’s remarks were softer than warnings Japanese authorities typically issue when they see yen moves as excessive, suggesting Tokyo is for now taking a cautious approach to the latest slide in the currency.

The yen‘s overnight depreciation was far milder than last year’s fall to nearly 152 yen against the dollar, a 32-year low. That prompted currency authorities to step in and warn they would take decisive action to halt the decline.

While a weak yen gives Japan‘s exporters a boost, it hurts households and retailers by pushing up the cost of already high raw material imports.

Suzuki declined to comment further on Friday, saying any “careless comment” may cause confusion in the currency market.