Japan Steps in to Stem Rising Yen

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Last updated at: (Beijing Time) Monday, June 24, 2002

Japan Steps in to Stem Rising Yen

Japanese monetary authorities intervened in the foreign exchange market on Monday to curb the surging yen after it rose to a seven-month high against the US dollar, the Ministry of Finance said.

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Japanese monetary authorities intervened in the foreign exchange market on Monday to curb the surging yen after it rose to a seven-month high against the US dollar, the Ministry of Finance said.

Finance Minister Masajuro Shiokawa said in a statement: 'Recent rapid movements of the dollar-yen exchange rates in the markets could have undesirable implications for the Japanese economy and the world economy.

'In this context, we have taken appropriate action today in the foreign exchange market.'

The ministry sold yen and bought US dollars to cap the yen's recent rise.

At 12.57 pm (0357 GMT; 11.57 am, Singapore time), minutes after the intervention, the US dollar was trading at 122.28 yen, compared with a low of 121.09 yen earlier on Monday, and against 121.21-27 yen in New York and 123.24-26 yen in Tokyo late Friday.

Mr Shiokawa warned of another round of intervention if the yen continued to strengthen.

The Bank of Japan intervened to sell the yen several times in late May after the Japanese currency rose to a five-and-a-half month high of 123.50 against the greenback.

A stronger yen tends to hurt Japanese exporters by making their products more expensive -- and thus less competitive -- in foreign markets. The yen's rise also cuts into exporters' earnings when they convert profits earned overseas into yen.

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