No euro intervention yet, Azumi hints

Kyodo

Finance Minister Jun Azumi said Friday the government is monitoring the euro’s decline over the “long term,” indicating he sees no immediate need to intervene in the currency markets to stem the yen’s appreciation.

“We are now closely watching developments in the foreign exchange market,” Azumi said. “I believe we must watch (the euro’s fall) over the long term.”

He also said Japan wants European leaders to step up efforts to contain the eurozone’s sovereign debt crisis. The weakening euro is reflecting strong concerns among market participants about the fiscal problems in the region, Azumi said, stressing the need for “addressing (such concerns) as soon as possible.”

The comment came as market participants were waiting for hints on market intervention.

But Azumi refused to comment on whether he views the euro’s slide as excessively volatile, which Tokyo normally regards as a development that must be addressed by intervention.

The euro currency plunged to a fresh 11-year low of ¥98.46 in New York on Thursday. Azumi expressed concern that the stronger yen is affecting Japanese exporters by paring their earnings.

On Europe, he urged “special efforts” by eurozone governments to prevent the debt crisis from dragging down global economic growth.

“If they will create a firewall to deal with the problems, we will do what we can, and this will help create a basis for growth . . . by generating a sense of reassurance around the world,” Azumi said, referring to Japan’s readiness to offer support on condition the eurozone ensures a bailout mechanism with adequate capital contributed by member countries.

Senior Finance Ministry officials have indicated the possibility of Japan making loans to the International Monetary Fund, which could in turn offer financial assistance to troubled eurozone countries, such as Italy and Spain, on the condition they adopt austerity measures.

Azumi also said he will discuss the issue with U.S. Treasury Secretary Timothy Geithner, who will visit Japan next week, with economic sanctions against Iran over its nuclear program also on the agenda.