Yen Goes Higher Despite Efforts to Weaken the Currency

Saying he was “very concerned” about the yen’s rise, Japan’s Prime Minister Naoto Kan said that the government is prepared to take “bold” action to ease the upward pressure on the yen. Concern continues to mount that the rising yen will make Japan’s exports more costly and will seriously diminish Japan’s all-important exports.

Analysts doubt however, that government intervention can do much to slow the yen’s climb. Since the beginning of the year, the yen has gained more than 13 percent against a basket of major currencies.

“Any attempts to weaken the yen will be futile,” said Richard Franulovich, a senior foreign-exchange strategist at Westpac Banking Corp. in New York. “Intervention, when it fights against the underlying fundamentals of a currency, is doomed to fail.”

Source: Bloomberg