Yen weakens on reports of further Bank of Japan action

Discussion in 'Indo Pacific & East Asia' started by Rahul92, Sep 25, 2010.

  1. Rahul92

    Rahul92 Senior Member Senior Member

    Sep 4, 2010
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    Japan's central bank is believed to have intervened for the second time in a week to combat the rising yen.

    Traders in Tokyo said a sudden jump in the dollar's value on Friday was due to the bank's selling of yen.

    Weakening the yen's value is designed to help Japanese exporters and bolster Japan's fragile economic recovery.

    Last week, the Bank of Japan began buying dollars on a large scale for the first time in six years, and said it was ready to take further action.

    In afternoon trading in Tokyo, the dollar jumped suddenly from mid-84 yen to as high as 85.38 yen before slipping back to 85.07 yen.

    "It appears that authorities have intervened," said Yu Yokoi, a foreign exchange dealer at Mizuho Bank.

    The Bank of Japan has not confirmed the latest move, although traders said it was unlikely officials would provide a running commentary on its interventions.


    The yen recently hit a 15-year high against the dollar, hurting Japan's car and electronics exporters by making their products less competitive overseas and eroding the value of profits brought back from overseas.

    Japanese exporters praised last week's intervention.

    "From the standpoint of aiding the competitiveness of Japan's manufacturing industry, we applaud the move by the government and the Bank of Japan to correct the yen's strength," carmaker Honda said in a statement.

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