Japan indicated on Friday that it would continue to intervene in foreign exchange markets when deemed necessary, on the eve of a Group of Seven meeting where tensions over competitive currency devaluation will be at the top of the agenda.
Finance Minister Yoshihiko Noda also said that the intervention Japan conducted last month, its first in more than six years, was intended to stop excessive moves and was not a signal that Japan is prepared to conduct large-scale intervention to guide the yen to a specific level.
Global policymakers are at odds over the dollar's broad-based decline, China's reluctance to give in to U.S. demands to allow the yuan to rise and growing portfolio flows pushing up emerging-market currencies. Some warn that trade protectionism could soon follow if tensions are not eased.
"We are approaching a G7 meeting, but regardless of this, Japan will take firm measures, including intervention, when needed," Noda told reporters when asked about the yen's rise to a 15-year high on Thursday. "This is Japan's basic stance," not far from a 15-year low of 82.11 yen hit on Thursday.
Tensions have grown over competitive currency devaluation, which is set to be a focal point Group of Seven and International Monetary Fund meetings starting on Friday.
Japan intervened on Sept. 15 by selling its currency for the first time in more than six years to stem its gains. The intervention did not reverse the trend of yen strength due on speculation the Federal Reserve will ease monetary policy further.
© 2024 Thomson/Reuters. All rights reserved.