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The inaction by authorities to stem the yen’s recent advance and prevent Tokyo stock dives has prompted investors to fret over the nation’s export-reliant economy.

Finance Minister Yoshihiko Noda on Thursday morning finally hinted at possible intervention in the foreign-exchange market — the first in six years — to stem the yen rise.

But his talks over lunch with Prime Minister Naoto Kan and Chief Cabinet Secretary Yoshito Sengoku produced nothing, except to increase disappointment among market players.

Their disappointment first came Monday as much-hyped talks between Kan and BOJ Gov. Masaaki Shirakawa ended up confirming only that they will work closely, rather than taking steps to counter the yen’s advance.

But even if officials do act, market players believe the options are likely to be limited ahead of the scheduled election next month to pick the governing Democratic Party of Japan’s new leader.

Their failure to come up with specific measures reminded the market that “any important decision-making would be difficult on the political front before the DPJ’s presidential election,” said Masafumi Yamamoto, chief foreign-exchange strategist at Barclays Bank in Tokyo.

The winner of the DPJ’s presidential election will be prime minister, and party lawmakers critical of Kan are trying to field a rival candidate.

One of the factors driving up the yen is the mounting concern over the global economic recovery, with investors seeking a safe-haven currency after a spate of recent data came in below forecasts.

The yen is perceived as a safer bet because Japan’s financial sector was not as damaged as its counterparts in the United States and Europe during the crisis following the collapse of Lehman Brothers Holdings Inc.

It is also reflective of a difference in stance toward monetary easing among authorities in the United States, Europe and Japan, analysts said, making it difficult for the Japanese side to act on its own.

“The buzzword seems to be sort of like an implicit competition among nations to weaken their currencies (to support their economies),” said Tsuyoshi Segawa, equity strategist at Mizuho Securities Co.

“I understand that since the pace of the yen’s strengthening is relatively gradual, we haven’t come to a point where the government and the BOJ think the yen’s advance is rapid . . . but the outcome (of the Kan-Shirakawa talks) could be taken as a message that Japan will accept what the United States and Europe do, and stand still,” he said.

The U.S. Federal Reserve recently decided to reinvest the proceeds from maturing mortgage-backed securities into U.S. government bonds in a shift from seeking an exit from extraordinary steps taken to ride out the recent financial crisis.

European Central Bank Governing Council member Axel Weber said recently the ECB should extend its loose monetary policy.

That helps weaken the dollar and the euro relative to the yen, but a stronger yen can be detrimental to Japan as it hurts exporters because their profits are eroded when brought back home, and thus the prices of their shares that play a major part of the Tokyo market.

Brokers said stocks are seen as undervalued, given that Japanese companies released generally strong earnings for the April-June quarter, but the yen’s strength has been a major drag.

A day after the talks between Kan and Shirakawa ended, the government reacted calmly to unsettled financial markets. Chief Cabinet Secretary Yoshito Sengoku said the administration is “closely watching market developments,” and its perception of financial markets and the global economy has not “changed at all.”

The Nikkei 225 ended Tuesday at 8,995.14, its lowest closing level since May 1, 2009, while the dollar fell to as low as ¥84.45, a fresh 15-year low during Tokyo trading hours. Major manufacturers have set their assumed exchange rate at ¥90.18 for the year, according to the BOJ’s latest quarterly “tankan” survey.

Although analysts said there is still a possibility that authorities will take action, as they did when the Dubai shock rattled global financial markets, the inaction to this point has encouraged investors to test Japanese authorities’ tolerance.

Finance Minister Noda said Tuesday evening currency moves are “obviously one-sided,” without indicating any immediate policy response.

With all these factors accelerating the momentum for investors to pile into the yen, the focus is now on the state of the U.S. economy amid investor concern its recovery is faltering, and possibly heading for a double dip, now that fears about the debt crisis in Greece have abated.

Toshikazu Horiuchi, equity strategist at Cosmo Securities Co., said the U.S. economic outlook will remain a key factor in both the yen rate against the dollar and the performance of Japanese stocks, and upcoming reports need to come in above market expectations to change the downbeat sentiment.

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