The International Monetary Fund said that it sees no factors that would compel Japan to intervene in the foreign exchange market to support the yen.
"We don’t see any conditions,” Sanjaya Panth, deputy director for the IMF’s Asia and Pacific Department, told reporters Saturday at the annual gathering of the IMF and World Bank in Marrakech, Morocco. Pantha cautioned that he wasn’t speaking on behalf of the Japanese authorities, who he said "may know things I don’t” about the situation.
Panth said the yen’s depreciation has been mostly driven by interest rate differentials, reflecting economic fundamentals as inflation rises elsewhere while the Bank of Japan sticks with its ultraloose policy to generate stable inflation. He said the IMF isn’t seeing key criteria that would support a need for intervention, namely dysfunction of markets, financial stability risks or de-anchoring of inflation expectations.
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