NTDTV
Yen Pulls Back on Government Intervention Possibility
Foto: NTDTV
The yen pulled back from 15-year highs against the dollar on Wednesday, after Japanese officials hinted at possible action, including yen-selling intervention, to stem the currency’s rise.
Tokyo’s Nikkei fell to a 16-month low as the yen firmed to as low as 83.58 against the dollar; but moved back above the mid-84 level after the Japanese finance minister sharpened his rhetoric on the yen’s steep gains, saying he would “respond appropriately, as needed.”
His comments were echoed by the top government spokesman, Yoshito Sengoku.
[Yoshito Sengoku, Chief Cabinet Secretary]:
“I believe excessive moves will negatively affect Japan’s real economy and possibly even the stability of Japanese companies. So we need to be extra cautious about the situation.”
“I believe excessive moves will negatively affect Japan’s real economy and possibly even the stability of Japanese companies. So we need to be extra cautious about the situation.”
Trade figures released Wednesday added to the sense of urgency and anticipation for currency intervention.
Japan’s export growth slowed for a fifth consecutive month in July, as overseas demand slowed.
Economists say a strong yen will hamper Japan’s exporters further.
According to Nomura Securities, every one yen rise against the dollar will trim recurring profit at major Japanese manufacturers by 0.9% this fiscal year.
Still, analysts say solo intervention by Japan is unlikely to have much effect in curbing the yen at a time when the U.S. and Europe are seen as unwilling to step into the currency markets.
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