Yen Falls Against Dollar, Euro as Bank of Japan May Intervene
By Ron Harui
Oct. 28 (Bloomberg) -- The yen fell amid speculation Japan's central bank will sell its own currency for the first time since March 2004.
The Group of Seven industrial nations expressed concern in an unscheduled statement yesterday about the yen's ``excessive volatility'' after a request from Japan, Finance Minister Shoichi Nakagawa said on the same day, adding that his government was ready to act if needed. The currency had earlier traded near the strongest versus the euro since May 2002 and close to a 13-year high against the dollar.
``There are fears of possible intervention by the Japanese authorities, so the yen is being sold,'' said Yuji Saito, head of the foreign-exchange group in Tokyo at Societe Generale SA, France's second-largest bank by market value.
The yen dropped to 92.93 against the dollar at 8:30 a.m. in Tokyo, after rising 1.7 percent yesterday. It reached 90.93 on Oct. 24, the highest since August 1995. The currency was at 115.73 per euro from 115.92 yesterday when it touched 113.64, the strongest level in more than six years.
The euro traded at $1.2444, after falling 1 percent yesterday and reaching $1.2334, the lowest in 2 1/2 years. The British pound was at $1.5524 from $1.5552. It touched $1.5269 on Oct. 24, the weakest since August 2002.
In the past month, Japan's currency has increased 13.8 percent against the dollar, 33.5 percent versus the euro, 35.2 percent versus the pound and 42.9 percent against the Canadian dollar on speculation investors will unwind carry trades, in which they get loans in countries with low borrowing costs and seek higher returns elsewhere.
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