Price data in Tokyo: Japan’s government interneviert in the foreign exchange markets. Source: AP
FRANKFURT / TOKYO . The victory was only a few days ago : On Tuesday upheld the ruling Democratic Party of Japan Naoto Kan Premier against a rival as party chief. The first decision was followed in the foot: Kan wants to stop the rise of the yen, it cost what it may. He no longer wants to watch as the local economy suffers. For the first time since 2004 the government intervened in the foreign exchange market on Wednesday to stop the soaring yen. On the Central Bank bought dollars and sold yen.
The leading Japanese business newspaper Nihon Keizai , " according to which the government was on Wednesday afternoon, the interventions in the foreign exchange market continued in London. Overall, Tokyo should therefore have intervened in the order of one billion yen or equivalent of around 9.3 billion euros. this was not confirmed . A government official who wished to remain anonymous , said only that " had been used very much money. "
U.S. Treasury Secretary Timothy Geithner probably already knew it when he gave an interview last week . The prospects of Japan’s intervention in the foreign exchange market survey , he said, Japan’s economic policy makers should do what they can to help their economies. On Wednesday, the government showed Kans what they mean. The dollar had previously fallen below the mark of 83 yen. This was the Japanese currency is no longer as expensive as 15 years. It was an isolation of Japan, said Finance Minister Yoshihiko Noda at a hastily called press conference in Tokyo. But the international partners had been notified . Europe was not enthusiastic Japanese government sources said .
No single action
Noda made it clear that intervention is not intended as a one-time action. "We will intervene decisively when necessary , including market intervention , " said the Minister of Finance. Masaaki Shirakawa bank chief justified the step , and pushed the Americans to pass the buck . The " growing uncertainties about the future, especially for the U.S. economy, " would require the step.
According to traders , the Japanese central bank bought U.S. dollars at an exchange rate of around 83 yen. "With today’s action the Japanese government has underlined its determination to stop the wild rise of the yen , "said Daisaku Ueno , president of the Gaitame.com Research Institute, a unit of Japan’s largest currency trader . "This action comes too late, but better than never . "
Other experts were positive . "As the Fed currency they need for this intervention , even providing , in principle, it has unlimited resources available, " commented Mikihiro Matsuoka , Japan chief economist of the Deutsche Bank. He therefore sees good prospects of success. The decisive factor for success is to Matsuoka view that the more reluctant Bank of Japan decided not to collect the interventions put into circulation with the yen in the normal course of its monetary policy again. This " sterilization " of jobs created by additional monetary assistance is often done in practice, because the Fed wants to avoid an increase in inflation . Since Japan is fighting for years but the problem of falling prices , takes this argument. The German Bank economist certifies the central bank , however, a low level to a policy that primarily relies on monetary expansion rather than on interest rate policy.
The yen falls by three percent to €
Because of the strong yen burden on export-oriented economy of the country , Japanese business leaders had strongly called for a counteraction . After the intervention the yen fell against the dollar by nearly three percent. The appreciation against the euro moved in the same order of magnitude. In the relation of the euro and U.S. dollars so there was no shift .
The Nikkei index closed with a gain of 2.34 percent at 9516 points. Profiteers were mainly export- car industry and electronics companies. Toyota led the gains , rising by 4.9 percent to 3040 yen. Camera manufacturer Canon climbed by 2.7 percent – the highest level since late June. At Sony The action was because the government also welcomed. We hope that informed Sony with , the government would " proceed to take the necessary steps " , but preferred " coordinate with other countries " .
China gets something out of the box shot
The intervention of Japan could undermine efforts primarily the U.S. , China to move to a faster appreciation of the yuan . China , the largest export nation in the world , is under international pressure. On Wednesday began a two-day meeting between U.S. representatives to discuss the issue of Chinese currency. China keeps its currency over the course a link to the U.S. dollar is low and thus promoting its exports.
The example of Japan , China now give ammunition to resist the pressure, experts believe . It is " of course, a favorable factor for China, which has for a long time even intervened violently , "said Tomo Kinoshita of Nomura Asia Economic Research Institute in Hong Kong. Next week to discuss the G20 finance ministers over the Chinese currency. The Central Bank of China not commented on the Japanese action on Wednesday.