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Yen faces more intervention
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June 18, 1999: 7:16 a.m. ET
Japan official promises more action to control currency in bid to boost economy
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LONDON (CNNfn) - The Bank of Japan will continue to intervene in currency markets to regulate the yen in a bid to get the economy back on track, a Japanese government official said Friday.
Sadaaki Numata, the spokesman for the Japanese foreign ministry, told CNNfn that Prime Minister Keizo Obuchi "is determined to make all available efforts to make sure the economy is on track to recovery."
Speaking from Cologne, Germany, before the start of the G8 summit, Numata confirmed that the Bank of Japan would continue to intervene to prevent a too-strong yen from threatening exports, which are vital to sustain the first signs of an economic recovery.
Last week, a far-larger-than-expected 1.9 percent growth in the Japanese economy for 1Q, the first expansion in two years, surprised the market. But most economists believe the upturn will not last, pointing out that public spending boosted the figures.
"The market has reacted to this nascent sign of recovery and we are keeping the value of the yen under control. I expect that to continue," Numata said.
The Bank of Japan spent between $5 billion and $10 billion buying dollars late last week and Monday, according to Seijiro Takeshita, director of Japanese strategy and economics at ABN Amro in London. This move sent the yen back towards the 120 mark to the dollar.
"A lot of traders are aware that there will be a big intervention if the yen breaks through (below) 118. Right now the [Bank of Japan] scare is working," Takeshita told CNNfn.com.
He added that there was a wide consensus among central bank and government officials to keep the yen around the 120 mark.
The yen stood at 119.05 to the dollar in midday trading in London.
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Bank of Japan
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