Finance Minister Shunichi Suzuki speaks at a press conference in Tbilisi on Friday.
14:07 JST, May 5, 2024
TBILISI – Japan, China, South Korea and the Association of Southeast Asian Nations on Friday shared concerns over excessive exchange rate fluctuations caused by speculation amid the continued depreciation of their respective currencies against the US dollar in the foreign exchange market.
The ASEAN Plus Three group held a meeting of their finance ministers and central bank governors in Tbilisi and adopted a joint statement citing “increased volatility of foreign exchange markets” as a risk to the regional economy
Finance Minister Shunichi Suzuki emphasized during a press conference that it is desirable for exchange rates to continue to move stably. “Excessive movements are undesirable,” he said.
Inflation concerns are rising in Asian countries as their currencies weaken. The Thai baht has fallen more than 7% against the dollar since the start of the year. The Indonesian rupiah has also fallen 5%, and the Indonesian central bank raised interest rates for the first time in six months in April.
The yen also temporarily fell to the lower ¥160 range against the dollar on April 29, its weakest level in about 34 years.
The yen then immediately rose to the ¥154 level. On Thursday, the yen rose from the ¥157 level to the ¥153 range in less than an hour.
The yen was at a high of ¥152 against the dollar when the New York market closed on Friday, but continued to fluctuate and reached an upper level of ¥151. On the possibility of currency intervention by the Japanese government and the Bank of Japan to buy the yen and sell the dollar, Suzuki said he would not comment. But he said: “If there are excessive movements, it may be necessary to ‘smooth them out’.”
During the meeting, the ASEAN Plus Three group formally agreed to expand the Chiang Mai Initiative, a regional currency exchange agreement designed to prepare for a currency crisis, and create a framework for responding to emergencies such as the spread of infectious diseases.
The finance ministers of Japan and the Pacific island states also met for the first time and agreed to cooperate on issues including climate change.
