Japan moves to rein in soaring yen

City A.M. Reporter
Japan sold the yen for the second time in less than three months after it hit another record high against the dollar, saying it intervened to counter speculative moves that were hurting the economy.

Finance Minister Jun Azumi said Tokyo had stepped into the market and would continue to intervene until it was satisfied with the results.

Tokyo's latest foray into currency markets followed weeks of warnings that its patience with the yen's strength was wearing thin, and came just days before the Group of 20 leaders' summit in Cannes, France.

The summit will focus on Europe's efforts to contain its sovereign debt crisis and avoid a repeat of the financial shock that roiled markets after the Lehman Brothers collapse in 2008.

But Tokyo is keen to win G20 understanding that a strong yen is one challenge too many for an economy grappling with a nuclear crisis, a $250bn (£156bn) rebuilding effort from a March earthquake and tsunami and ballooning public debt.

Japan also argues that the yen is sought by investors worried by the euro zone debt crisis and stuttering US growth and the demand has nothing to do with the fragile health of the Japanese economy.

The dollar vaulted more than 4 percent past 79 yen, from around 75.65 yen, after Tokyo began selling its currency. The dollar had touched a record low of 75.31 yen earlier on Monday.

"I have repeatedly said that we would take decisive steps against speculative moves in the market," Azumi told a news conference. "Unfortunately it (the market) has not reflected our economic fundamentals at all."