Japanese Yen Slips in Asian Trading, Intervention by Ministry of Finance Unconfirmed

By: Barbara Zigah

The Japanese Yen dropped sharply versus the greenback and other major currencies in Asian trading today, leaving traders to wonder whether or not the Japan Ministry of Finance has once again intervened their currency’s upward movement. Confirmation from the Ministry of Finance has not yet been forthcoming. As reported at 2:15 p.m. (JPT) in Tokyo, the Japanese Yen slipped against the U.S. Dollar, trading at 85.40 Yen, a sharp decline from the 84.60 Yen it had been trading at only moments before. Likewise, against the common currency Euro, the Yen traded at 112.95 Yen, from the moments earlier 113.75 Yen. 

A forex manager in Tokyo noted the movements and called them “strange.” A senior trader at one bank in Japan, however, suggested that the movement could have been as a result of over-reaction by other market participants, not necessarily the Japanese authorities.

Irrespective of the Japanese government’s involvement in today’s fall of the Japanese currency, it is apparent that Naoto Kan, the Japanese Prime Minister, is worried about the effect a strong currency would have on Japan, with its export-driven economy. Early this morning, the Japanese Finance Minister stressed that, if necessary, Japan would take whatever decisive steps it deemed necessary to curb the Yen’s appreciation.