Japan's top FX diplomat says watching for any excessive yen moves: Nikkei

Pedestrians are reflected in an electronic board showing the graph of the recent fluctuations of the exchange rates between the Japanese yen against the U.S. outside a brokerage in Tokyo, Japan, February 4, 2016. REUTERS/Yuya Shino

TOKYO (Reuters) - Japan’s top currency diplomat Masatsugu Asakawa said he was watching daily exchange-rate moves carefully to check for excessive volatility, the daily Nikkei newspaper reported.

“Buying pressure has concentrated on the yen as a safe haven as global financial markets were unstable,” Asakawa said in an interview in Tuesday’s edition of the Nikkei, adding that the rise in the yen had outpaced rises in other currencies since the start of this year.

On recent declines in Chinese stocks and the yuan, Asakawa, vice finance minister for international affairs, said it was “natural” for stocks and currency rates to make adjustments.

The problem, however, was that market moves would be exaggerated if investors get the impression that policymakers were taking an ad-hoc policy response to market swings, Asakawa was quoted as saying.

“Communication with markets is important and there is room for improvement,” he said.

Asakawa said he hoped to continue constructive dialogue with Chinese policymakers to avoid the risk of a hard-landing in China’s economy, which would deal a huge blow to the global economy.

Reporting by Leika Kihara; Editing by Richard Pullin