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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: yard_man who wrote (3052)	3/29/2004 11:55:30 AM
From: mishedlo	Read Replies (2) of 116555

Japan: Intervention Policy Will Continue TOKYO (Reuters) - Japan's Ministry of Finance (MOF) said on Monday it would continue its foreign exchange intervention, shrugging off a British newspaper report that Tokyo would stop its massive forays into the currency market. Japan has been intervening in accordance with a Group of Seven (G7) statement issued last month that said excessive volatility was undesirable, and that policy remains unchanged, a senior MOF official told Reuters. "We have been intervening all along based on the Boca Raton statement -- that excessive volatility and disorderly movements are undesirable -- and we will continue to do so if necessary," the official said. Japan has conducted more than 30 trillion yen ($285 billion) of yen-selling intervention since the start of last year in a bid to rein in the buoyant yen. The yen rose to 3-1/2-year highs near 105.10 to the dollar last month, up more than 10 percent from lows near 120 set last August. Earlier on Monday, the yen rose sharply to come within a whisker of last month's highs on a report on the Web site of the Times newspaper that quoted Bank of Japan officials as saying Japan was "confident the Japanese recovery no longer depends on export strength... the interventions have served their purpose." The yen has since pulled back sharply but the MOF official declined to confirm whether the ministry intervened on Monday. The official noted it was the ministry that controlled Japan's foreign exchange policy, not the central bank. "Intervention policy is set by the Ministry of Finance. I don't know what the BOJ is saying (in the Times report) but people should ask us (about currency policy)," the official said. Japan's intervention funds come from the MOF's foreign exchange special account. When intervention takes place, the ministry places orders with the BOJ, which then makes the transactions in the market as an agent bank. The MOF official also played down speculation that the ministry may no longer feel a need to keep the yen down once the March 31 book-closings for most Japanese corporations are over. "There seems to be a lot of talk about a policy change in March or April, but there is no change in our intervention policy," he said. ($1=105.28 yen) reuters.com

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