— Japan’s Noda Declines Comment If MOF Plans To Intervened in FX
TOKYO (MNI) – Japanese Finance Minister Yoshihiko Noda on Friday
said the government will watch foreign exchange rates closely but
declined comment on whether Tokyo will take action in the forex market
in order to stem the yen’s rapid rise.
He also told a regular news conference that investor confidence in
the U.S. dollar remains intact despite the recent warnings from credit
ratings agencies about a possible default on U.S. government debt
“The one-sided movement has continued in the forex market in the
past several days. We will watch the developments in the forex
market closely,” he said, referring to the yen’s rise against the
Asked about the possibility of a forex market intervention by
Japan, Noda said, “I will refrain from commenting on whether we will
intervene or not.”
He also declined comment on the difference between the current
market conditions and the yen’s surge in mid-March, when the Group of
Seven major nations jointly intervened to stop the yen from rising too
fast and hurting Japanese exports.
On March 18, a week after the massive earthquake and tsunami
wrecked northeastern Japan, the G7 conducted its first concerted forex
action since September 2000.
The concerted G7 action was expected after the yen soared to a
record high of Y76.25 versus the dollar on March 17, 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.
This week the dollar slumped to around Y78.45.
Noda said the government will try to prevent some negative factors,
such as the appreciation of the yen and power supply shortage, from
hurting corporate sentiment.
He made no comments on specific forex levels but said the recent
rise in the yen has been caused by several overseas factors.
Asked about the warnings from credit ratings agencies about a
default on U.S. Treasury debt obligations in case the debt limit will
not be raised in time, Noda replied, “I don’t think confidence in the
U.S. dollar has been shaken significantly.”
Standard & Poor’s late on Thursday placed the U.S. on negative
credit watch, saying there is a “one-in-two” chance it will cut the
AAA/A-1+ sovereign rating within 90 days.
On Wednesday, Moody’s placed its U.S. Aaa government bond rating
and related ratings, like those of Fannie Mae and Freddie Mac, on review
for possible downgrade.
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