G7 pours in billions to stabilise the yen
THE Group of Seven (G7) rich nations succeeded in calming global financial markets yesterday in a rare concerted intervention to restrain a soaring yen.
The dollar surged to 81.98 yen after the G7 moved to pour billions into markets buying dollars, euro and pounds.
An official revealed that yesterday's intervention totalled 2 trillion yen (€17.6bn).
The dollar later dropped back to under 81 yen, but it was still far from the post-war record low of 76.25 yen hit on Thursday.
The value of the yen rocketed as international insurance companies bought the currency in huge volumes so they can pay out on claims following the disaster.
The Japanese government is hoping the value of the yen will fall, so that it will kickstart the ailing economy by making their exports more affordable.
"The only type of intervention that actually works is co-ordinated intervention, and it shows the solidarity of all central banks in terms of the severity of the situation in Japan," said Kathy Lien, director of currency research at GFT in New York.
Japan's Nikkei share index ended up 2.7pc.
It lost 10.2pc for the week, wiping $350bn (€247bn) off market capitalisation.