Japan Intervenes to Curb Rising Yen

Posted August 3rd, 2011 at 11:15 pm (UTC-5)
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Japan intervened in currency markets Thursday to drive down the yen.

Finance Minister Yoshihiko Noda said the country's fragile recovery from its twin disasters was threatened by the rise of the yen, which was approaching a post-World War Two high set immediately after the March 11 earthquake and tsunami.

Other leading economic powers joined with Japan to force down the currency on that occasion, but this time Noda said Japan was acting on its own.

He did not comment on the size of the intervention, which normally consists of selling off yen to flood the market and drive down the price. Immediately afterward, the yen was trading at about 78.3 to the dollar compared to a high of 76.29 on Monday.

A high yen hurts Japan's export-oriented economy by making its products more expensive in foreign markets. The rise in the yen against the dollar was blamed on international concerns about weakness in the U.S. economy.

At a press conference, Noda described the recent movements in the yen as “one-sided” and “excessive.”