JAKARTA — Japan and South Korea have signalled their readiness to intervene in the foreign‑exchange market to curb volatility after both countries’ currencies suffered sharp declines against the US dollar.
According to a Reuters report on Saturday (14/3), Japan’s Finance Minister Satsuki Katayama and South Korea’s Finance Minister Koo Yun‑cheol expressed concern over the significant depreciation of the Japanese yen and the South Korean won during their annual bilateral meeting in Tokyo.
In a joint statement, the two ministers said the steep weakening of their currencies must be monitored closely as it could trigger instability in financial markets, particularly in foreign exchange.
Pressure on both currencies has intensified amid rising geopolitical tensions linked to the conflict involving the United States and Israel against Iran.
This situation has strengthened the US dollar as a safe‑haven asset, while putting downward pressure on currencies of countries heavily dependent on energy imports, including Japan and South Korea.
Both governments reaffirmed their commitment to continue monitoring foreign‑exchange movements and to take action if volatility becomes excessive or if exchange‑rate movements appear disorderly.
Market data shows the Japanese yen touched its lowest level in 20 months last Friday, hovering near 160 per US dollar.
That level is widely viewed by market participants as a psychological threshold that could prompt Japanese government intervention.
Meanwhile, the South Korean won this month also broke through the psychological level of 1,500 per US dollar for the first time since March 2009.
Katayama stated that Japan is prepared to respond to currency movements whenever necessary. He noted that exchange‑rate volatility can directly affect household economic conditions, especially amid surging global oil prices.
However, some Japanese policymakers privately believe that intervention to support the yen may be less effective under current conditions.
This is because demand for the US dollar is expected to continue rising if global geopolitical tensions persist. (BS/LM)
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