The dollar slumped to 14-year lows against the yen yesterday, prompting expressions of alarm from Japan’s government as it battles to coax the world’s No. 2 economy back to health.
Japanese Finance Minister Hirohisa Fujii said the government was being “vigilant” and would take appropriate measures if currency rates “move abnormally” — although traders played down prospects for official intervention.
The greenback briefly dropped to ¥86.28, its lowest level since it traded at ¥84.92 on July 7, 1995. A stronger yen threatens the competitiveness of Japanese exporters just as the economy is slowly pulling out of a deep slump.
The dollar’s fall was driven by expectations that the US Federal Reserve will maintain its ultra-low interest rates for some time, sending investors in search of other higher-yielding assets, dealers said.
The US unit fell to a 15-month low against a basket of currencies including the euro, yen, pound and the Swiss franc. Its slide prompted gold prices to shoot up to record highs above US$1,195 an ounce.
The dollar’s woes have been exacerbated since Fed minutes on Tuesday indicated no change ahead for the low-rate regime and called the currency’s recent decline “orderly.”
“This yen strengthening is caused by dollar selling rather than yen buying, so this is not something Japan can handle by itself,” Mizuho Securities senior technical analyst Yutaka Miura said. “This trend will continue unless the Japanese government takes action, in cooperation with the US.”
The dollar’s fall sparked some speculation among traders that Tokyo may step into currency markets for the first time since 2004 to curb the yen’s ascent and so help Japanese exporting companies.
But most market watchers did not see Fujii’s remarks as suggesting that intervention was immediately on the horizon.
“Fujii’s comments highlighted the possibility of intervention on any further sharp falls, say below ¥85,” Satoshi Tate, senior vice president in the forex division of Mizuho Corporate Bank, told Dow Jones Newswires. “But at the same time, the comments did not convey a sense of real urgency, since they were essentially a repetition of the government’s typical line.”
Sumitomo Trust & Bank forex strategist Jitsuo Tachibana said: “Japan is unlikely to intervene in markets on its own, and would need to consult with other central banks in the world.”
A government minister and the bosses of two of Japan’s biggest business electronics groups expressed concern the stronger yen would hurt the export-led economy’s recovery from its worst post-war recession.
“The yen’s abrupt surge could have negative effects on the Japanese economy. I’m worried,” said Shizuka Kamei, the minister in charge of financial services.
Toshiba president Norio Sasaki said: “We would like coordination among governments to tackle rapid [currency] movements.”
Panasonic president Fumio Otsubo said: “We fear an underlying strong-yen direction in markets, and we are in an unpredictable situation.”
UPDATED (3:40pm): A suspected gas explosion at a shopping mall in Taichung this morning has killed four people and injured 20 others, as emergency responders continue to investigate. The explosion occurred on the 12th floor of the Shin Kong Mitsukoshi in Situn District (西屯) at 11:33am. One person was declared dead at the scene, while three people were declared deceased later after receiving emergency treatment. Another 20 people sustained major or minor injuries. The Taichung Fire Bureau said it received a report of the explosion at 11:33am and sent rescuers to respond. The cause of the explosion is still under investigation, it said. The National Fire
ACCOUNTABILITY: The incident, which occured at a Shin Kong Mitsukoshi Department Store in Taichung, was allegedly caused by a gas explosion on the 12th floor Shin Kong Group (新光集團) president Richard Wu (吳昕陽) yesterday said the company would take responsibility for an apparent gas explosion that resulted in four deaths and 26 injuries at Shin Kong Mitsukoshi Zhonggang Store in Taichung yesterday. The Taichung Fire Bureau at 11:33am yesterday received a report saying that people were injured after an explosion at the department store on Section 3 of Taiwan Boulevard in Taichung’s Situn District (西屯). It sent 56 ambulances and 136 paramedics to the site, with the people injured sent to Cheng Ching Hospital’s Chung Kang Branch, Wuri Lin Shin Hospital, Taichung Veterans General Hospital or Chung
‘TAIWAN-FRIENDLY’: The last time the Web site fact sheet removed the lines on the US not supporting Taiwanese independence was during the Biden administration in 2022 The US Department of State has removed a statement on its Web site that it does not support Taiwanese independence, among changes that the Taiwanese government praised yesterday as supporting Taiwan. The Taiwan-US relations fact sheet, produced by the department’s Bureau of East Asian and Pacific Affairs, previously stated that the US opposes “any unilateral changes to the status quo from either side; we do not support Taiwan independence; and we expect cross-strait differences to be resolved by peaceful means.” In the updated version published on Thursday, the line stating that the US does not support Taiwanese independence had been removed. The updated
‘LAWFUL USE’: The last time a US warship transited the Taiwan Strait was on Oct. 20 last year, and this week’s transit is the first of US President Donald Trump’s second term Two US military vessels transited the Taiwan Strait from Sunday through early yesterday, the Ministry of National Defense said in a statement, the first such mission since US President Donald Trump took office last month. The two vessels sailed south through the Strait, the ministry said, adding that it closely monitored nearby airspace and waters at the time and observed nothing unusual. The ministry did not name the two vessels, but the US Navy identified them as the Arleigh Burke-class guided-missile destroyer USS Ralph Johnson and the Pathfinder-class survey ship USNS Bowditch. The ships carried out a north-to-south transit from
RSS