Japan PM vows 'decisive action' against strong yen

TOKYO (AP) — Japan’s prime minister said Tokyo will continue to take action against a strong yen, signaling that authorities would intervene in the market again to rein in the currency.

“We will continue to take decisive action if needed” to curb the yen’s rise, Prime Minister Naoto Kan said at a meeting of business leaders. His comments came a day after Japan intervened in the currency market by selling yen and buying dollars for the first time since 2004.

The yen had spiked to fresh 15-year highs against the dollar after Kan survived a leadership challenge Tuesday from another ruling party lawmaker. Currency traders had bet that Kan was unlikely to intervene.

Following the Japanese central bank’s intervention to sell yen on Wednesday, the dollar shot above the ¥85 level from ¥82.87 earlier in the day. The dollar stood at ¥85.28 in Tokyo Thursday afternoon.

A strong yen is sapping strength from the country’s already fragile economic recovery. The Japanese currency has risen about 10 percent against the dollar this year, and business leaders had been pressing the government for help. Japan’s vital exporters are worried by a strong yen because it erodes their foreign income when repatriated and makes their products less competitive in overseas markets.

Toyota Motor Corp. estimates that every one-yen climb versus the dollar saps ¥30 billion from earnings.

Japanese officials did not provide a figure for how much yen the central bank had sold. But Japan’s top business daily Nikkei said the government may have sold more than ¥2 trillion ($23.4 billion), which would be largest single-day intervention on record.