The yen plunged against the dollar and euro after Japan intervened in markets to weaken its currency.
The yen sank 3.5 percent to 78.61 per dollar as of 10:48 a.m. in Tokyo. It lost 3.2 percent to 110.87 per euro.
Japanese Finance Minister Jun Azumi said today the government intervened unilaterally to weaken the yen.
Japan Intervention’s Economic Success Hinges on Azumi’s Commitment to Act
Japan intervened to weaken the yen for the third time this year and pledged more sales after the currency’s gain to a postwar high against the dollar threatened a recovery from the March 11 earthquake and nuclear disaster.
The yen plunged more than 4 percent to 79.20 after authorities sold the currency in a unilateral intervention. Japanese Finance Minister Jun Azumi said the move was carried out to combat “one-sided speculative moves that don’t reflect the economic fundamentals of our economy.”
Azumi pledged to keep selling the yen in the foreign- exchange market after the currency reached a high of 75.35 against the dollar earlier today. It was the first yen-selling action by Japan since August. The yen and the Swiss franc have soared to records as investors sought havens from Europe’s fiscal debt woes.
“There was growing frustration among exporters” amid a strengthening exchange rate and flooding in Thailand that has impaired production, said Martin Schulz, a senior research fellow at Fujitsu Research Institute in Tokyo, who used to do research for the Bank of Japan. “The government wanted to show that they get the message.”
The yen was at 78.80 per dollar as of 4:57 p.m. in Tokyo after earlier trading as high as 75.35. Azumi pledged to continue to intervene until he is “satisfied,” adding that an appreciating yen threatens the nation’s rebound from the March 11 earthquake.
‘Welcome’ Intervention “We welcome the intervention very much,” Hiroki Yoshimatsu, executive officer at Mitsubishi Electric Corp., told reporters at the company’s earnings briefing in Tokyo today. Still, “it’s unclear how long the current level will last.”
Panasonic Corp. forecast an annual net loss of 420 billion yen, citing the impact of the strong yen and stronger competition in its overseas digital products business. The Osaka-based company reversed an earlier projection for profit of 30 billion yen for the year ending March 2012, it said in a statement today.
