Yen falls after G7 support pledge
Published 18/03/2011 | 00:43
The yen has fallen from historic highs after the Group of Seven major industrialised nations promised coordinated intervention in currency markets to support Japan's recovery from a catastrophic earthquake and tsunami.
The G7 pledge came after the yen hit an all-time high against the US dollar on Thursday, possibly threatening Japan's exports and hampering its economic recovery from the March 11 quake that triggered an unfolding nuclear crisis.
After the announcement the dollar rose to 81.26 yen from 79.45 yen, but it was unclear whether that was due to government intervention or to traders reacting to the news. The dollar briefly slumped to 76.53 yen on Thursday - an all time low for the US currency and a record high for the yen.
Japan's Finance Minister Yoshihiko Noda said the government would intervene in the Tokyo market once morning trading opened on Friday. But the ministry later declined to confirm whether that happened.
Mr Noda said the planned intervention was meant to calm "volatility" and G7 governments had no target exchange rate. "We are not aiming for a specific level," the minister told reporters.
The G7 statement added to a flurry of moves by Japan to calm roiled financial markets following the 9.0-magnitude quake and tsunami in north-eastern Japan, which has killed thousands of people and left hundreds of thousands homeless.
The benchmark Nikkei 225 stock average was up about 3 % in the early afternoon following a turbulent week of trading amid the escalating nuclear crisis.
In a joint statement issued following emergency discussions, the G7 officials said that the United States, Britain, Canada and the European Central Bank will join with Japan in a "concerted intervention" in currency markets.
It would be the first time since late 2000 that the governments have jointly intervened in currency markets.
"We express our solidarity with the Japanese people in these difficult times," the statement said.