Japan Pledges Action Against Market Volatility From Iran

Japan is prepared to coordinate with international authorities and take action against market volatility stemming from the ongoing conflict involving Iran, Finance Minister Satsuki Katayama stated on Friday. The government is monitoring the situation closely as geopolitical tensions continue to jolt financial markets and disrupt global trade.

Bank of Japan Deputy Governor Ryozo Himino also addressed the situation, noting that the central bank remains vigilant regarding movements in the USD/JPY exchange rate. He warned that currency fluctuations could significantly impact underlying inflation and public perceptions of future price trends.

We need to be mindful that exchange-rate fluctuation has a bigger impact on price moves than in the past.

Through this channel, they could affect inflation expectations and underlying inflation.

Katayama told parliament that the administration is ready to implement measures to counter the economic fallout from the Middle East conflict, including the potential compilation of an extra budget. The instability has already impacted energy markets, including the price of Brent Crude Oil, and complicated logistics for oil transports.

The Finance Minister highlighted that Japan is coordinating its response with Group of Seven counterparts. She emphasized the need for a nimble and unified approach to the market instability triggered by recent developments in the region.

We are ready to take all necessary steps, coordinating closely and nimbly with overseas authorities.