TOKYO/SEOUL, March 14 (Reuters) – Japan and South Korea expressed concern on Saturday about the rapid devaluation of their respective currencies and said they were ready to act against more volatility in foreign currencies.
Japan’s finance ministers Satsuki Katayama and South Korea’s Ko Yoon-cheol “expressed serious concern over the recent rapid appreciation of the Korean won and the Japanese yen,” they said in a statement after their annual meeting in Tokyo.
The yen and won fell as tensions fueled by the U.S.-Israel war in Iran boosted safe-haven demand for the dollar and hurt the currencies of countries that rely heavily on imported oil.
“Furthermore, they reaffirmed that they will closely monitor foreign exchange markets and continue to take appropriate measures against excessive volatility and disruptive movements in exchange rates.”
The yen hit a 20-month low on Friday and is nearing the 160.00 line against the dollar, which many in the market believe will prompt Japan to intervene to support the currency. Won broke the $1,500 psychological barrier this month for the first time since March 2009.
Tokyo and Seoul shared the view that there was significant volatility in financial markets, including foreign exchange, Katayama told a news conference after the meeting.
“The Japanese government is fully prepared to respond at any time, considering the impact that currency movements may have on people’s livelihoods during rising oil prices, and I believe both sides share this understanding,” she said.
Katayama regularly says Japan is ready to act on the yen’s moves, although some policymakers say privately that intervening to support the yen now could prove futile, as the flood of demand for dollars will only intensify if the war drags on.
(Reporting by Jehoon Lee and Jack Kim in Seoul and Makiko Yamazaki in Tokyo; Editing by Tom Hogg and William Mallard)
