Yen Declines as Nakagawa Says Japan May Take Currency Action
Dec. 18 (Bloomberg) -- The yen weakened from near a 13-year high against the dollar after Japanese Finance Minister Shoichi Nakagawa signaled the nation is ready to intervene in the foreign-exchange market for the first time in four years. “We will take necessary steps if needed” to limit the currency’s advance and protect the overseas earnings of Japanese exporters, Nakagawa told reporters in Tokyo. The dollar fell to an 11-week low against the euro on speculation the Federal Reserve’s near-zero interest rate policy will reduce the appeal of U.S. assets. “We are at such high levels now that yen intervention becomes a possibility, and that’s making some people nervous,” said Saburo Matsumoto, Tokyo-based senior manager of foreign- exchange sales at Sumitomo Trust & Banking Co., Japan’s fifth- largest bank. Japan’s currency fell to 87.90 per dollar as of 3:39 p.m. in Tokyo from 87.24 yen yesterday in New York, when it reached 87.14, the highest level since July 1995. It declined to 126.99 per euro from 125.80 yesterday. The dollar was at $1.4448 per euro from $1.4419 after reaching an 11-week low of $1.4456. The yen may decline to 88 per dollar today, Matsumoto said. Japan may intervene in foreign-exchange markets as the yen’s recent gains are abnormal, Chief Cabinet Secretary Takeo Kawamura also said today in Tokyo. The government expects the Bank of Japan to respond appropriately to the yen, he said. Central banks intervene when they buy or sell currencies to influence their exchange rates. http://www.bloomberg.com/apps/news?pid=20601087&sid=aTXgOF.0mChg&refer=home
