The recent fall of the yen “has gone too far,” Finance Minister Hiroshi Mitsuzuka said Jan. 21, adding that appropriate action would be taken against any extreme movements in the foreign exchange market. Mitsuzuka made the comment at a regular news conference, after the yen fell into the 118 range against the dollar in Tokyo morning trading.Meanwhile, Prime Minister Ryutaro Hashimoto said the problem in the foreign exchange market is not the yen’s current level but its wild fluctuations. “I don’t see the current trend as excessive,” he told reporters. “Rather, I’m worried about wild ups and downs.”Pointing out that the dollar also has firmed against the German mark, the prime minister said the yen-dollar rate at present reflects not the yen’s weakness but the dollar’s strength backed by the firm-footed economy of the United States. The dollar momentarily advanced to 118.28 yen in the morning, its highest level since March 16, 1993, although the U.S. currency later fell back into the 117 yen range in response to Mitsuzuka’s remarks.”(Authorities) will stand watch over the foreign currency markets, and it is natural that they take appropriate action against excessive movements,” the finance chief said. It appeared to be the strongest comment so far made by Japan’s financial authorities during the latest spate of the yen’s fall against the dollar.Mitsuzuka indicated that he expects other Group of Seven industrialized nations to reach their own conclusions on the foreign exchange market. “We must act appropriately (in the foreign exchange market) while paying close attention” to moves by other G-7 nations, he said. The finance ministers and central bank heads of the G-7 are expected to meet in Berlin in early February, and there is increasing speculation as to the extent they will discuss foreign exchange levels and whether they will make concerted efforts to halt the dollar’s sharp rise.
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