Japan silent on yen’s drop

Japanese authorities were silent after a sudden jump in the dollar against the yen that traders said was due to the Bank of Japan intervening in the currency market Friday to weaken the Japanese currency.

In early afternoon trading in Tokyo, the dollar jumped suddenly from mid-84 yen to as high as 85.38 yen before slipping back to 84.68 yen, prompting traders to say the central bank had intervened.

The yen’s recent spike to 15-year highs has battered Japan’s vital car and electronics exporters by making their products less competitive overseas and eroding the value of profits brought back from overseas.

Officials at the Bank of Japan and Ministry of Finance declined to confirm the action.

Yuji Kawashima, chief forex strategist at Daiwa Institute of Research, said there was an “obvious movement” in exchange rates that he thought signaled that authorities had bought dollars to weaken the yen.

On Sept. 15, Japan intervened in the currency market for the first time in more than six years after the dollar had fallen to a 15-year low of 82.87 yen.

Prime Minister Naoto Kan, who met with President Barack Obama in New York on Thursday, said last week that Japan would “continue to take decisive action if needed” to keep the yen from appreciating.
Source: AP