Japan will respond "resolutely" to excessive weakness in the yen, Finance Minister Shunichi Suzuki said Wednesday, after the currency fell to a 34-year low against the U.S. dollar despite the Bank of Japan's first interest rate hike in 17 years last week.

Suzuki told reporters that appropriate action would be taken "without excluding any options" to cope with excessive moves in the yen, raising speculation that the government may intervene in the currency market for the first time since late 2022.

He also said Japan will be closely monitoring developments in the market with a "high sense of urgency."

On March 19, the BOJ scrapped its negative interest rate policy in its first rate hike since 2007, overhauling the central bank's unorthodox monetary easing framework of the past decade designed to end deflation.

The central bank, however, pledged to maintain monetary easing for now, prompting market participants to believe that the interest rate gap between Japan and the United States is unlikely to shrink sharply.

Earlier in the day, BOJ board member Naoki Tamura said short-term interest rates would remain near zero for the time being.

The yen briefly sank near the 152 line against the dollar in Tokyo on Wednesday. The currency last depreciated to 151.94 against the dollar in October 2022, before Japan stepped into the market by buying the yen for the dollar.

==Kyodo

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