The Bank of Japan on Monday went on a dollar-buying spree to stem further falls in the U.S. currency in the aftermath of the Sept. 11 terrorist attacks in New York and Washington.
The intervention came shortly after midday, after the dollar briefly dropped to 116.90 yen in Tokyo during the morning, its lowest level since Feb. 28.
The dollar, whose midday quote was 117 yen.02-05, shot up to 118.00 yen in the wake of the intervention but later eased a little. At 5 p.m., it was quoted at 117.77-80 yen.
Finance Minister Masajuro Shiokawa issued a statement, saying, "The recent sharp appreciation of the yen in the exchange markets could have undesirable implications for the recovery of Japan's economy.
"In this context, we have taken appropriate action today in the exchange market."
The dollar's slide places further pressure on the ailing economy by hurting the earnings of Japan's major exporters.
A weak yen will also act as a barricade to cheap imports and could help the government and BOJ in their fight against deflation. Japan last engaged in dollar-buying and yen-selling April 3, 2000.
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