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Japanese Yen Hits 14-Year Peak against Weakening U.S. Dollar
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Thursday, November 26, 2009 GMT
By: Barbara Zigah
Investor speculation that Japan’s central bankers will permit the continued appreciation of the Japanese Yen led to that currency’s 14-year peak against the U.S. Dollar in trading in Asia. Hirohisa Fujii, the Minister of Finance in Japan, commented that the Japanese government would take action only in the case of “abnormal” movements, opening the door for the speculation and making it easier for market players to buy the Japanese unit, according to one currency strategist in a Tokyo bank. At one point in the New York trading day yesterday, the Japanese Yen rose against the U.S. Dollar to 86.53 Yen, the highest since mid-1995.
A former Japanese official familiar with the foreign exchange situation, Eisuke Sakakibara, commented in a broadcast interview that he believes that the U.S. Dollar might drop to a low of 85 Yen at which point the current Japanese government would likely consider intervening. Further, Mr. Sakakibara believes that, because the U.S. administration is attempting to allow the U.S. Dollar to decline gradually in an attempt to correct the country’s huge trade imbalances, intervention is not currently under consideration. Nonetheless, Hirofumi Hirano, Japan’s Chief Cabinet Secretary said that the Japanese government is closely watching currency movements, especially in light of the continuing weakness of the U.S. Dollar.
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