TOKYO, Dec 28 – Japan\’s Finance Minister Yoshihiko Noda on Tuesday warned against a resurgence of the yen and said the government was ready to step into forex markets for a second time in three months.
As the dollar slipped to a three-week low 82.45 yen, Noda reiterated Tokyo\’s readiness to sell and drive down the yen against the US unit to safeguard the country\’s export sector.
"In the past several days, a week or so… we have seen movement that leaned in one direction. I would like to continue monitoring the market\’s movement during the year-end and the new year," he told reporters.
"There is no change in our stance that we would take resolute steps when we see excessive volatility," he said.
The yen has steadily gained this year as a safer choice over the more risky dollar and euro due to the uncertain outlook for the US and eurozone economies.
The US Federal Reserve\’s easy monetary policy — which has seen it effectively printing money — has also weighed on the dollar.
A strong yen hurts Japan\’s exports by making them more expensive and also erodes companies\’ overseas earnings when repatriated, with many companies considering sending more production overseas as a result.
The Japanese finance ministry, under Noda\’s leadership, carried out a massive yen-selling intervention in September, the first time in six years, as it tried to halt the rise of the Japanese currency, which was sitting at 15-year highs.
Noda defended his decision to intervene, saying: "If we hadn\’t intervened, I am sure things would have been significantly worse."
Noda\’s comment did not immediately impact the market, where trading was thin between the Christmas and New Year\’s holidays.
