Published : Oct. 23, 2011 - 19:32
TOKYO (AFP) ― Japan’s finance minister vowed to take “decisive action” against speculative moves in currency markets after the yen hit a record high against the dollar, Kyodo news agency reported.
The dollar touched 75.78 yen in New York on Friday, breaking its record low of 75.95 yen on Aug. 19 as yen buying accelerated on risk aversion amid concern over the eurozone sovereign debt crisis.
“We will take decisive action against excessive, speculative moves in the market,” Finance Minister Jun Azumi told reporters on Saturday, according to Kyodo.
Japan’s Finance Minister Jun Azumi (Bloomberg)
He added that the yen’s appreciation did not reflect the actual condition of the Japanese economy but was rather being bought for its perceived safety amid a negative outlook for the U.S. and European economies, according to Kyodo.
“We are in a situation where the yen’s rate could wipe out the achievements of Japanese companies trying to survive,” Azumi was quoted as saying.
The stronger yen could erode the competitiveness of Japanese exporters and further damage the economy, already suffering in the aftermath of the March earthquake and tsunami.
The Tokyo government has said it would secure an additional 15 trillion yen ($196 billion) in funds for currency market intervention when it compiles a planned extra budget for the current fiscal year.
The move would lift the accumulated total amount the government is allowed to borrow from the market to finance intervention to 165 trillion yen.
This means it would be able to raise an additional 46 trillion yen in the future if necessary because it has already used up 119 trillion of the total.