Kan says Japan to take 'decisive' currency market action when necessary+

TOKYO, Aug. 27 Kyodo -
Prime Minister Naoto Kan said Friday that Japan will take ''decisive action''
when necessary against excessive currency fluctuations.
The statement, the strongest by Kan aimed at stemming the yen's appreciation
against a range of major currencies since he assumed office in June, was widely
interpreted as hinting at the possibility of market intervention.
Kan also told reporters in Tokyo that he will meet with Bank of Japan Governor
Masaaki Shirakawa soon after the latter returns from the United States on
Monday.
The prime minister expressed hope that the central bank will act flexibly and
implement appropriate measures to address the strengthening of the yen, which
is increasingly damaging Japan's export-reliant economy.
Earlier this week, the yen rose to a 15-year high against the U.S. dollar and a
nine-year peak against the euro, adding to concern about the pace of economic
recovery, ahead of Kan's attempt to secure reelection as leader of the
Democratic Party of Japan in the ruling party's presidential election on Sept.
14.
Kan said the government will decide on the outline of new economic measures on
Tuesday, a day before the commencement of campaigning for the DPJ's
presidential election in which he will battle with Ichiro Ozawa, a longtime
political kingpin who has been critical of the premier's handling of the
fragile recovery.
The envisioned measures will especially aim to address downside risks resulting
from the yen's surge and slowing overseas economies, he said.
Kan said the government is considering frontloading some of the programs under
its new growth strategy, mapped out in June, to boost domestic demand and
create new jobs.
Also on Friday, Finance Minister Yoshihiko Noda said the government will
continue to work ''more closely'' with the central bank to prevent the yen from
rising further.
Noda said the government will take ''necessary action'' to cope with the rising
yen, noting that the currency's gains are having ''various impacts'' on the
Japanese economy and the situation is ''serious.''
An industry ministry survey showed Friday that 40 percent of manufacturers plan
to transfer production abroad if the yen hovers at the 85 level to the dollar.
==Kyodo
2010-08-27 20:16:54