OSAKA; Tokyo on Tuesday threatened further possible action by the Group of Seven leading industrialised nations to intervene in currency markets to weaken the yen, after Friday's concerted move.
"First we agreed on joint intervention on March 18, and based on that agreement, we put language in the statement saying, 'We will monitor exchange markets closely and will cooperate as appropriate,'" Finance Minister Yoshihiko Noda said of the latest G7 action and accompanying communique.
"That tells you everything."
The comments reinforced caution among players that if they push up the yen too sharply and quickly, Japanese authorities may move to push it down with the possible backing of other G7 countries, dealers said.
A Japanese government bureaucrat familiar with the nation's currency policy told Dow Jones Newswires earlier in the day that "there wasn't any such decision made" to limit concerted yen-selling by the G7 to last Friday.
Friday's moves by Japanese, US, eurozone, Canadian and British monetary authorities -- their first concerted action in a decade -- pushed the yen down from its post World War II dollar high hit after the twin natural disasters.
It also demonstrated international sympathy for Japan's plight, as volatile currency movements threaten its crucial export sector. A strong yen makes goods more expensive overseas and erodes companies' repatriated profits.
Last week the greenback tumbled below 77 yen, a move Tokyo blamed on speculators betting on an influx of capital by Japanese companies to aid reconstruction efforts.
On Tuesday the yen was at 80.95 to the dollar from 81.07 late Monday in New York.
Japan intervened unilaterally in September 2010 to weaken the unit in a move that drew criticism from some corners.
Comments
Comments are closed.