Japan's Kanda says important for forex rates to move stably reflecting fundamentals

<p>"Japan's top currency diplomat" Masato Kanda</p><ul><li>
Strong market interest in US rate cut timing, BOJ policy outlook,
both of which could be used by speculators as excuse for volatile
market moves</li><li>Always communicating
closely with financial authorities including BOJ, Fed</li><li>Declines to comment
on BOJ policy beyond saying it is among 'important events' when asked
about ending negative interest rates</li><li>Always carefully
watching impact of central bank decision on financial markets; will
continue to do so</li><li>Important for
currency exchange rates to move stably reflecting economic
fundamentals</li><li>Ultra-loose monetary
policy helped pull economy out of deflationary state, but also had
negative side-effects</li><li>US economy stronger
than expected but if tight monetary policy is prolonged, that could
hurt domestic consumption, become risk to global growth</li></ul><p>This is mild verbal intervention for Kanda, especially the " important for forex rates to move stably reflecting fundamentals" that is in the headline to the post. What is more broadly interesting to me is Kanda saying similar to what Bullard said yesterday: "US economy stronger than expected but if tight monetary policy is prolonged, that could hurt domestic consumption".</p><ul><li><a href="https://www.forexlive.com/centralbank/former-st-louis-fed-president-bullard-says-fed-cuts-could-come-as-soon-as-march-20240124/" target="_blank" rel="follow" data-article-link="true">Former St Louis Fed President Bullard says Fed cuts could come as soon as March</a></li></ul><p>The timing is very curious, almost like Kanda was clued in to say this. </p><p>Japan's Finance Ministry's Vice Finance Minister for International Affairs Kanda. He is the guy who will instruct the BOJ to intervene, when he judges it necessary. Often referred to as Japan's 'top currency diplomat'.</p>

This article was written by Eamonn Sheridan at www.forexlive.com.