, TOKYO, Sep 17 – The yen fell in Asian trade on Thursday due to selling by exporters and worries that Japan\’s new government will seek to reverse free-market reforms, dealers said.
The dollar edged up to 91.13 yen in Tokyo morning trade from 90.94 in New York late Wednesday.
The euro was at 1.4710, close to its highest level in almost a year and up from 1.4708 in late New York deals. The euro gained to 134.08 yen from 133.74.
Traders were cautious a day after Japanese Prime Minister Yukio Hatoyama took command of a new centre-left government that has in its top ranks opponents of market liberalisation and an ex-trade union activist.
"Looking at the cabinet line-up, it\’s little wonder that the yen has been sold. I\’m uneasy about the future," said Hachijuni Bank forex strategist Masatsugu Miyata.
In particular Hatoyama\’s choice of minister for postal reform and financial supervision — 72-year-old Shizuka Kamei — triggered concern among investors.
He is a critic of what he describes as US-led "unbridled capitalism" and opposed postal privatisation, which he is expected to move to reverse.
Japan\’s new finance minister Hirohisa Fujii, 77, is seen by investors as a safer pair of hands and he gave the yen a boost Wednesday by saying that in principle he opposed intervening in the market to weaken the currency.
The comments "reinforced expectations that the new ruling Democratic Party would be more tolerant of a stronger yen than the outgoing Liberal Democratic Party (LDP)," NAB Capital analysts wrote in a note.
The recent strength of the yen has dealt a heavy blow to the country\’s exporters. But Japan has not intervened in the foreign exchange market since March 2004, allowing the currency to find its own level against the dollar.
The Democrats\’ basic political ideology is to redistribute income to consumers from companies, "which were the main beneficiaries under the LDP government’s weak yen policy," said JPMorgan economist Masaaki Kanno.
"In this context, a strong yen is good for consumers, as it increases consumers\’ real income by lowering prices," he added.