As the yen continues to rise in the currency market, the government of Japan will have to take another action yet to weaken the currency.
The yen set a new high against the U.S. dollar Friday with analysts anticipating a possible intervention by Japanese authorities.
In a statement to the upper house plenary session, Prime Minister Naoto Kan said the government may take action when necessary to intervene in the currency market pointing out ‘the excessive yen rises would hurt’ Japan’s economy and financial system.
On a similar note, Finance Minister Yoshihiko Noda said the continued one-sided surging of the yen in the currency market would have a negative impact on the economy. Noda further said the government would look into long-term preparations necessary should the yen ‘gets stuck’ at its current highest level since the March 11 quake.
The Bank of Japan is also set to ease monetary policy should the rise in yen continues in support of the government’s effort to intervene with the yen.
Japan had earlier intervened in the currency market to stem the surging of the yen but the Japanese currency continued to gain.
In the wake of the tumultuous three-fold disaster that hit Japan in March, central banks from around the globe coordinated an intervention to halt the surging of the yen.
Photo by Mr Wabu