Japan’s finance minister said he was “prepared to undertake intervention” in the foreign exchange market if the yen rose further and sharply, describing more explicitly than before a policy the U.S. opposes.
The comment by Taro Aso in parliament on Monday was his first direct reference to the possibility of intervention during his tenure as finance minister under Prime Minister Shinzo Abe.
Aso’s remarks added to signs of tension between the U.S. and Japan over exchange rates as both countries struggle to gain traction in the face of slowing global growth. Gains in the yen
are generally a blow to Japan’s exporters, making them less competitive than their rivals in the U.S.
Despite Aso’s rhetoric, the currency market showed little initial reaction, suggesting that if Tokyo wants to weaken the yen, it may now have to back its words with action.
The finance minister also broke from the protocol of keeping currency negotiations between countries under wraps to avoid feeding undue speculation. Aso disclosed how Japan’s Ministry of Finance and the U.S. Treasury Department have been at odds in private conversations over the yen’s recent appreciation.