05 Dec 2004 11:26 GMT
UK PRESS: Japan Urging Europe To Intervene On Forex
LONDON (Dow Jones)--A senior Japanese Ministry of Finance official said that Japan is urging its European counterparts to join a campaign of coordinated currency market intervention, The Observer newspaper reported.
"If the dollar is depreciating, we should have coordinated action: that has already been communicated to my European counterparts," the unnamed official said.
However, European Central Bank President Jean-Claude Trichet made only one passing reference to euro strength after the ECB's policy meeting last Thursday, saying he viewed its rise as "unwelcome."
Trichet declined to comment on currency intervention and urged those who speak about exchange rates to exercise more discipline than they have.
Friday, U.S. Treasury Secretary John Snow reiterated that the Bush administration has a strong dollar policy.
Snow's comments, made in an interview with CNBC, came as the dollar sat at an all-time low against the euro around $1.3461 and near a four-and-a-half year low against the yen around Y102.05.
In the interview, Snow would not comment on reports that European and Japanese authorities may be considering intervention to slow the dollar's decline.
Japan is also warning the White House that there will be "enormous capital flight" from the dollar if the Bush administration maintains its laissez-faire approach to the dollar's decline, The Observer added.
"The Japanese government is going to ask for a strong dollar policy; if it continues to fall, there would be enormous capital flight from the dollar," said Kaoru Yosano, chairman of the LDP's policy council.
Japan will be calling on its fellow G7 governments to demand the U.S. deal with the massive fiscal deficit that has helped prompt the dollar's decline, he added.
Yosano's remarks echoed a warning from the senior Japanese Ministry of Finance official, who said that if the U.S. does not push up interest rates to make the dollar more attractive, "the one way sentiment on the dollar will have a negative impact on the flow of capital into the U.S.," the newspaper reported.
-By Neil Keane, Dow Jones Newswires; +44-20-7842-9495; neil.keane@dowjones.com
(END) Dow Jones Newswires
December 05, 2004 06:26 ET (11:26 GMT) |
