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The yen soared to a new high for the year of 123.50 against the dollar in Tokyo on Wednesday before yen-selling intervention by the Finance Ministry and Bank of Japan brought it back down around the 125 level later in the day.

The yen’s recent rise has been “too rapid,” Finance Minister Masajuro Shiokawa said in a news conference. “We have taken appropriate action, and will continue to closely monitor the market and take appropriate action as necessary.”

The intervention brought the yen, which reached the 123 range for the first time since December, down to near 125 at 5 p.m. The Bank of Japan last intervened in the currency markets to halt the yen’s ascent Sept. 28.

“This could be a turning point in the yen’s rise, since it is probable that the Finance Ministry will continue to intervene to prevent the yen from rising above the mid-123 range, and then intervene again if the yen fails to fall further,” said Hidehiko Inamura, vice president of Citibank NA’s Global Forex sales market.

Japan’s economic recovery is largely dependent on the strength of exporters, which are helped by a weak yen and a recovery in the U.S.

The Finance Ministry has therefore shown its “strong objection” to recent bouts of yen buying based on superficial signs of improvement in Japan and worries about the strength of the U.S. economy, Inamura said.

Meanwhile, the Nikkei finished up 160.82 points, or 1.4 percent, at 11,961.98, marking the index’s highest finish since Aug. 8. It fell 55.38 points Tuesday.

“The strong yen had helped prompt profit-taking selling in shares issued by exporters,” said Tsuyoshi Segawa, an equity strategist at Shinko Securities, “but it triggered buying in domestic demand-sensitive issues, including companies such as general contractors.”

The yen’s recent rise also spurred increased purchases of Japanese shares by foreign investors, encouraged by signs that the nation’s economy has bottomed out.

Analysts say it is a mistake to interpret the yen’s recent strength and rises in share prices as an indication of strength in the overall economy. The increases in share prices are likely to be temporary, though it may continue in the near term, they added.

“We have to remember that recent rises in share prices are not based on progress in structural reforms,” said Masatoshi Sato, senior strategist at Mizuho Investors Securities Co. “Unless we see recovery in the core operations of companies, a real recovery in share prices is unlikely.”

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