TOKYO, Sept 10: Japanese Prime Minister Naoto Kan on Friday called on other nations not to interfere with Japan’s effort to lower the yen, should Tokyo decided to intervene in the market.
Kan, in a debate with his rival for the ruling party leadership, also accused the eurozone nations of navigating the single currency down.
“We are working (with the United States and Europe) and asking them that we don’t want them to say anything negative, should we take some kind of action,”Kan said.
Japan has been increasing the prospect of intervention in the currency markets amid loud calls from businesses to act on the surging yen, which is sitting at 15-year highs against the dollar around 84 yen.
The Japanese unit has appreciated as an uncertain outlook for the US and eurozone economies pushed investors to sell down the dollar and euro.
A high yen hurts Japanese exporters, the nation’s main economic engine, by making their products relatively more expensive overseas, while reducing their overseas earnings when repatriated to Japan.
“We can say that the current situation is the eurozone is guiding the euro to weaken. In the US, President (Barack) Obama is saying he wants to double exports,” Kan said.
“Under these circumstances, it is quite difficult to ask them for coordinated efforts” to lower the yen, Kan said.
Market intervention is generally more effective when executed as a coordinated effort among major countries.
Japanese ministers have repeatedly said they were examining ways to sell down the Japanese unit, messages aimed at persuading investors to weaken the yen. Japan has not intervened in currency markets since 2004, and players are not convinced it will do so at current levels.—AFP