Mindful of U.S. warnings against the recent rise in Japan's surpluses, high-ranking financial officials April 10 launched a sudden tirade of comments that the recent fall of the yen is excessive and hinted at corrective action. Their remarks effectively halted the yen's plunge against the dollar, pushing it from the day's high of 127.16 yen to 126.09-12 yen as of 5 p.m.
Finance Minister Hiroshi Mitsuzuka, speaking at a convention of the nation's trust banks in Tokyo, said authorities would "act resolutely" to deal with extreme foreign exchange movements -- the most candid expression of concern yet during the latest phase of the yen's depreciation. The remark -- unexpectedly strong for a Japanese finance minister -- was taken to imply that authorities would not hesitate to intervene in the market if the yen's slide continues.
In morning trading, the yen weakened past the 127 mark for the first time in four years and eight months against the greenback as market participants continued buying dollars on the belief that authorities will not intervene. The reason behind the yen's weakness is a disparity in long-term interests between Japan and the United States, dealers said.