TOKYO (MNI) – Japanese Finance Minister Yoshihiko Noda said on
Friday that the joint intervention in the foreign exchange market by the
Group of Seven industrial nations is targeted at restoring stability to
the dollar-yen foreign exchange rate.
G-7 finance ministers and central bank governors held an emergency
telephone conference call for about two hours from 0700 JST (2200 GMT).
“Following the G7 agreement, the government and Bank of Japan will
implement intervention in the foreign exchange market from 9 a.m.
(0000 GMT),” Noda told reporters.
“In cooperation with Japan’s action, monetary authorities of other
G-7 nations will act during their respective (market) hours.”
Noda added that he asked for joint intervention by the entire G-7.
Noda didn’t comment on the scale of Japan’s yen-selling operation,
saying the MOF will release such data two months later, as is its normal
practice.
Forex traders confirmed that the BOJ, on behalf of the MOF, stepped
into the market to buy dollars for yen.
The concerted G-7 action was expected after the yen soared to a
record high of Y76.25 versus the dollar early Thursday, breaking the
previous record high of Y79.75 hit in April 1995, three months after the
Great Hanshin Earthquake hit the western Japanese city of Kobe.
The dollar rose to over Y81 after the intervention from Y79.50 just
before the G-7 announcement.
Japan last intervened in the forex market on Sept. 15, 2010, its
first yen selling operation in over six years. It sold a total of Y2.125
trillion to buy U.S. dollars. The yen at the time had hit a series of
15-year highs at around Y83 to the dollar.
“I stressed (during the G-7 conference call) that Japan’s economy
is sound, and that Japan will cope with (the tragic) events with a
strong will,” said Noda.
tokyo@marketnews.com
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