Prime Minister of Japan, Naoto Kan has hinted on Thursday that the authorities are ready to continue the intervention in the foreign exchange market to stop the rapid growth of the yen threatens economic recovery. Kahn will take decisive action if needed to loosen the yen, the news agency quoted Prime Minister Jiji.
Yesterday the government for the first time in six years, intervened in the foreign exchange market and sold about 2 trillion yen, making Japanese currency began to fall rapidly to a maximum of 15 years against the U.S. dollar.
However, the Asian currency trading session on Thursday morning, the yen began to rise again. Several players are waiting for a new intervention from the Japanese government, if the dollar falls to the Japanese currency to a level below 85 yen.
Analysts believe that Kahn wants to show initiative in the matter of increasing the yen, after he won election as leader of the ruling Democratic Party on Tuesday and intends to make clear that the government can put pressure on the central bank, that he eased monetary policy .
"Kahn tries send signal that his party solidary. He emphasizes intention Japan take resolute measures through intervention "- notes strategist Sumitomo Trust & Banking Ayako Sera.
Bank of Japan has no plans to support government intervention to new mitigation of monetary policy, but expressed the willingness to step in early October, if the economic recovery will remain under threat, sources said.
CB Chairman Masaaki Shirakawa said on Thursday that the saturation of the economy the money supply - the so-called quantitative easing - leads to low prices and stimulate the economy.
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