ank of Japan Intervenes
To Halt the Yen's Rise
Dow Jones Newswires
TOKYO -- The Bank of Japan intervened in global currency markets Monday,
buying dollars to slow the yen's rise.
In afternoon trading in Tokyo, the dollar was quoted at 120.60 yen, up nearly
three yen, or 2.25%, from 117.95 yen late Friday in New York.
Earlier in the day, the dollar fell to as low as 117.91 yen. But it suddenly
jumped above 119 yen on rumors that the Bank of Japan, the nation's central
bank, had intervened to prop up the U.S. currency.
Eisuke Sakakibara, Japan's vice finance minister for international affairs,
confirmed that the Bank of Japan had intervened. "We took appropriate
steps," he said.
Mr. Sakakibara, whose knack for influencing exchange rates earned him the
moniker "Mr. Yen," said that in order to ensure a recovery of Japan's
economy, a premature strengthening of the yen is undesirable.
"We are watching the forex market situation closely. If needed, we will take
decisive measures," he said.
Market participants speculated that the Bank of Japan may have spent as much
as $10 billion on the intervention.
Haruhiko Kuroda, the head of the Ministry of Finance's international bureau,
echoed Mr. Sakakibara's comments.
Recently, there has been concern that the stronger yen will hurt Japan's ailing
economy by cutting into exports.
The Bank of Japan began intervening in the morning, boosting the U.S. unit to
119 yen from an intraday low of 117.91 yen. Traders said the bank continued
to intervene, selling the yen at 118.20 yen, 118.80 yen, 119.20 yen, 119.50
yen and 120 yen.
The persistence of the central bank is the main factor boosting the U.S.
currency, traders said. Indeed, the BOJ's aggressive dollar buying came
despite heavy selling by U.S. funds to repatriate yen carry trade positions.
"There's really no one else that would be buying now," said Hirokazu Note,
chief foreign exchange dealer at Sumitomo Bank. |
