Gov't frets over yen's 'one-sided' move but shows no policy response+

TOKYO, Aug. 24 Kyodo -
The government again expressed its concern about the yen's strength on Tuesday,
saying its recent rises against the U.S. dollar and other major currencies are
''obviously one-sided,'' but the lack of an immediate policy response pushed
the Japanese currency up further to a 15-year high.
''Rapid fluctuations in foreign exchange (rates) are not preferable,'' Prime
Minister Naoto Kan told reporters, adding, ''We will cautiously watch (the
currency market).''
As the yen's rises, mainly against the dollar and the euro, have added to
pressure on the Japanese economy, which has shown signs of slowdown, market
participants have increasingly bet that Tokyo might step in the market to stem
the yen's rise.
Finance Minister Yoshihiko Noda said the government is paying ''serious
attention'' to the market, adding that the yen's recent moves are ''obviously
one-sided.''
Noda cautioned that excessive or disorderly moves in the market will have a
negative impact on economic and financial stability. But as for a possible
intervention by Japanese monetary authorities, he refused to comment.
Following his comments, the dollar quickly fell to the lower 84 yen range, a
level last seen in 1995. Analysts said the minister's remarks added to market
expectations that the Japanese government would not take any immediate action
to counter the yen's surge, which has damaged the earnings of Japanese
exporters.
The euro declined to around the 106 yen line, a nearly nine-year low, in
European trading.
Given poor performances by export-oriented issues, Tokyo stocks slid with the
benchmark Nikkei 225 index ending the day at the lowest point in nearly 16
months.
Like Noda, Chief Cabinet Secretary Yoshito Sengoku said earlier in the day that
the government will keep its stance of closely monitoring market developments.
''Our perception of markets and the global economy has not changed at all,''
the government's top spokesman said in a morning press conference. ''We are
closely watching market developments, including whether speculative money has
been mobilized.''
Political parties were more aggressive about wanting to take any emergency
measures to address excessive market volatility.
Democratic Party of Japan Secretary General Yukio Edano, who held talks with
Sengoku over the phone, urged the government to quickly respond to sharp rises
in the yen and falling share prices, according to a party lawmaker.
The government ''must consider short-term responses when it deals with rapid
volatility'' in the currency and other markets, Edano, the ruling party's No. 2
after its president and Prime Minister Naoto Kan, was quoted as saying.
The biggest opposition Liberal Democratic Party began its process to compile a
policy response to the market unsettlement.
LDP President Sadakazu Tanigaki told a meeting of party executives that they
should study measures that would enable a solid economy, criticizing the
DPJ-led government for moving slowly as it is obsessed with a party
presidential election slated for next month rather than how it would deal with
the economic hardship.
==Kyodo
2010-08-24 23:11:59