TOKYO, Sept 25 - Japan's top financial diplomat, Zembei Mizoguchi, said on Thursday that the authorities were ready to intervene against the rising yen if needed. "We are seeing speculative moves, and that's not appropriate. We will always be ready to act as needed and will be watching the market," Mizoguchi, the vice finance minister for international affairs, told reporters as he arrived at his office.
The yen jumped to a three-year high of around 110.91 against the dollar on Tuesday on speculation that Japan would refrain from intervening after a weekend Group of Seven statement urged more flexibility in exchange rates. Market players interpreted that as a call on Japan and China to stop weakening their currencies. Mizoguchi, who attended the G7 meeting in Dubai, played down the statement's mention of currencies, saying the main issue was the improving outlook for global economies as the United States showed strong signs of recovery and geopolitical risks receded. Mizoguchi and other Finance Ministry officials have stressed that the G7 meeting did not herald any change in their foreign exchange policy. "Basically, there is no change in our stance," Mizoguchi said. He also said he believed the market would eventually focus on fundamentals.
The yen took a breather on Thursday and was quoted at around 111.85 to the dollar at 0150 GMT, compared with about 111.80 in Wednesday's late New York trading. Traders said it was tempered by wariness of intervention and a retreat in Tokyo share prices. The government has intervened heavily over the past year to keep a stronger currency from hurting export manufacturers, spending a record nine trillion yen in just the first seven months of the year. It did not intervene in August. Markets have also focused on whether the new finance minister, Sadakazu Tanigaki, would adopt a different foreign exchange policy. Tanigaki, however, has made clear he would not stray from the stance shown by his predecessor, Masajuro Shiokawa.//