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Japanese monetary authorities have spent more than 3 trillion yen intervening in the currency market since late May, according to statistics compiled by the Finance Ministry.

During the yen-weakening campaign, the exchange rate has gone from 125 yen.61-64 to the dollar on May 21, the day before the intervention began, to 119 yen.55-57 at 5 p.m. Monday.

The most recent dollar-buying spree, carried out by the Bank of Japan on behalf of the ministry, came Friday.

Two reports on the receipts and payments of Treasury funds, one released last month and the other on Monday, indicate the Foreign Exchange Fund Special Account incurred a total deficit of 3.29 trillion yen. The account is mainly used to intervene in the currency market.

The BOJ intervened three times in May and four times in June in a bid to keep the yen from appreciating too rapidly against the falling dollar and thereby keep exporters’ profits high.

The reports are believed to have covered all but Friday’s intervention.

The amount used in the period is roughly equal to the 3.2 trillion yen utilized by the BOJ to fight a strengthening yen immediately after the Sept. 11 terrorist attacks in the United States.

The June report, believed to cover four yen-selling operations beginning May 31, indicates that the special account incurred a deficit of 2.26 trillion yen. The May report, believed to cover intervention moves on May 22 and May 23, shows an account deficit of 1.03 trillion yen.

Policy unchanged

Vice Finance Minister for International Affairs Haruhiko Kuroda said Monday the nation’s exchange rate policy remains unchanged, hinting the ministry is prepared to continue intervening in the currency markets as the dollar continues to drop in value.

A weak dollar and strong yen saps overseas earnings of Japanese companies, the main driver of the recent economic uptick.

Kuroda’s comment came after the Bank of Japan, acting on behalf of the ministry, intervened in the currency markets in Europe and New York on Friday.

The dollar-buying, yen-selling operation was the BOJ’s seventh since May 22, but the first carried out through the European and U.S. monetary authorities.

Kuroda declined comment on the intervention. But asked about the recent strengthening of the euro against the dollar, he said the euro’s “undervaluation is being corrected” by the market.

At 5 p.m, in Tokyo, the dollar was trading at 119.55-119.57 yen, compared with Friday’s late quotes of 119.45-55 yen in New York and 119.20-30 yen in Tokyo.

The euro was quoted at $0.9923-9925 and 118.80-84 yen, compared with $0.9915-9925 and 118.50-60 yen at 5 p.m. Friday in New York.

Kuroda said he thinks the improvement in business sentiment among major Japanese manufacturers in a survey released earlier in the day is a reflection of the fact that “the world economy as a whole is in a process toward recovery.”

The BOJ said Monday in its “tankan” quarterly survey that business sentiment among large manufacturers had improved significantly, marking the first upturn in seven quarters.

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