TOKYO (Reuters) - Japan’s finance minister said on Saturday he would take decisive action against excessive and speculative yen moves, Kyodo news agency reported, threatening to conduct currency intervention after the yen rose to a record high against the dollar.
Jun Azumi was also quoted by Kyodo as saying that the yen’s appreciation was not so much a reflection of Japan’s economic fundamentals, but reflected the relative economic conditions in Japan, Europe and the United States.
“I would like to take decisive action on excessive and speculative movements,” Azumi was quoted by Kyodo as telling reporters.
“We’re in a situation where the foreign exchange rates would wipe out earnings by hard working companies.”
His comments came after the U.S. dollar tumbled on Friday and hit a record low against the yen on speculation Europe was closer to solving its debt crisis.
The dollar fell as low as 75.78 yen on trading platform EBS, surpassing its previous record low of 75.94 set in August.
Since September last year, Tokyo has intervened in the currency market twice on its own and once jointly with other Group of Seven rich nations to cool the yen’s gains.
But the effects of intervention have proved short-lived due to Europe’s sovereign debt crisis, which is sending investors into perceived safe-haven assets such as the Japanese currency.
Japan’s economy is believed to have rebounded in the third quarter from a recession caused by a devastating March earthquake.
But the recovery is now under the threat of a slowing global growth and a strong yen, which reduces the value of profits earned abroad by Japanese firms and makes their exports less competitive.
Japan announced on Friday it would spend 2 trillion yen ($26 billion) on subsidies to encourage companies buffeted by a strong yen to keep factories and jobs in the country.
($1 = 76.130 Japanese Yen)
Reporting by Rie Ishiguro; Editing by Yoko Nishikawa