Japanese officials today expressed growing discomfort over persistent yen rises, putting markets on alert for possible action in response to ever louder business complaints that an unchecked currency climb was hurting the export-reliant economy.
While finance minister Yoshihiko Noda repeated his mantra about watching the market closely and refrained from a stronger warning that Tokyo was ready to act decisively when needed, markets geared up for possible intervention as the yen heads toward the record high of 76.25 hit days after the March 11th earthquake.
The dollar fell to a four-month low against the yen below 78 after US president Barack Obama warned of dire economic consequences if the deadlock in talks on the debt ceiling leads to a default on bond obligations.
It briefly spiked in late morning before sliding back and traders said there were no signs of official intervention. A senior finance ministry official declined to comment on whether Tokyo had stepped into the currency market.
Japanese policymakers and business leaders have become more vocal about the potential harm of a strong yen. Yesterday, the head of Keidanren, Japan’s biggest business lobby, called for joint Group of Seven intervention to stem yen gains.
