Japan Signals More FX Action, Coy On G20 Discussions
TOKYO, Aug 5 (Reuters) – Japanese Finance Minister Yoshihiko Noda on Friday repeated that he was closely watching yen moves, signalling Tokyo’s readiness to continue with its yen-selling intervention that media said reached a record 4 trillion yen ($50.6 billion).
But Noda also said he wanted to spend more time determining the effect of Tokyo’s action, a comment which briefly pushed up the yen against the dollar as market players interpreted it as a sign Tokyo may hold off intervention in the near future.
Fiscal and economic woes in Europe and the United States pushed up the yen near record highs as investors sought the currency as a safe haven, prompting Japan to intervene in the exchange-rate market and ease monetary policy to ease the pain the export-reliant economy.
“There’s no change to our basic stance that we want to monitor markets closely. It’s better to wait for a little while before judging the impact of intervention,” Noda told a news conference.
“Of course, we have to watch currencies, but the Dow (industrial average) fell a lot, so today I also want to watch the stock market.”
World stocks plunged to new lows for the year on Thursday with a sell-off in markets accelerating sharply as investors fretted about the outlook for the global economy and piled into safe-haven bonds. The overnight sell-off pushed the Nikkei stock average down sharply on Friday.
Noda offered no sign that G7 or G20 financial officials are considering discussing the global slowdown and market instability, or whether Tokyo may be initiating such discussions.
“I agree that these subjects should be discussed. We have the G20 meeting in September. I am sure these subjects will come up at a lot of international meetings,” Noda said. ”Each problem is important, but how to prioritise these issues is something to discuss from here on,” Noda said in response to questions whether G20 need to discuss currencies, the sovereign debt crisis and the U.S. economy.
Japanese officials have not been clear on whether they got consent from Japan’s G7 counterparts in acting solo in the market.
When asked about the cool reception that officials in Europe and the United States have given to Japan’s intervention, Noda said: “We are communicating, but I won’t comment on each country’s stance.”
Economics Minister Kaoru Yosano on Friday warned markets that they should not assume that Tokyo is done stepping into the market, while stressing again the need for Japan, Europe and the United States to adopt common policies to contain the pessimism about the global economy.
The dollar briefly rose above 80 yen on Tokyo’s solo intervention in the currency market but has since fallen back to around 78.80 yen.
Japan probably sold a record 4 trillion yen ($50.6 billion) in an intervention on Thursday, nearly double the amount in the previous solo effort in September 2010, the Nikkei newspaper reported on Friday. ($1 = 79.020 Japanese Yen) (Additional reporting by Rie Ishiguro; Editing by Tomasz Janowski)
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