BOJ seen intervening heavily, selling yen
Wed September 3, 2003 10:30 PM ET
TOKYO, Sept 4 (Reuters) - The Bank of Japan was seen intervening heavily in the foreign exchange market on Thursday, pushing up the dollar by more than one yen, market sources said.
The sources said the central bank, acting on behalf of the Ministry of Finance, initially stepped into the market when the greenback fell to a three-and-a-half month low of around 115.75 yen and was seen repeatedly buying the dollar above 116 yen.
The dollar rose more than the yen to around 116.90 yen before settling around 116.74 yen at 0207 GMT.
MOF officials were not immediately available for comment.
But Japan's top financial diplomat, Zembei Mizoguchi, said earlier that short-term fluctuations and overshooting of foreign exchange rates was undesirable.
Mizoguchi, vice finance minister for international affairs, told reporters in Phuket, Thailand, where he is attending a meeting of the Asia-Pacific Economic Cooperation (APEC) forum, that authorities were closely monitoring the market.
Japanese officials are worried that excessive strength in the yen could hurt exports, an important driver of the economy, which is showing signs of recovery after a decade of stagnation.
Tokyo spent a record nine trillion yen ($78 billion) in intervention in the first seven months of this year to keep the yen from strengthening too much.
The MOF surprised the market by disclosing last week that it had conducted no intervention in August.
This led some in the market to believe that Japan would refrain from another round aggressive intervention for now since the economy seems to be recovering and after the White House reiterated on Tuesday that currency rates were best set by markets and that intervention should be kept to a minimum.
Speculation had also grown that U.S. Treasury Secretary John Snow had pressed Finance Minister Masajuro Shiokawa to curb Japanese intervention when they met on Monday, although officials repeatedly said Snow made no specific comment about the yen. ($1=115.90 yen) |
