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Incoming Prime Minister Yoshihiko Noda should encourage companies to use the yen’s rise to invest abroad instead of protecting them by intervening in the currency market, former currency official Toyoo Gyohten said.

“You can’t just protect the status quo in the foreign-exchange market,” Gyohten said Wednesday in an interview in Tokyo. “If there’s no way around the strong yen, it would be good to make the most of it. Japanese companies should invest directly overseas and the government should support that.”

The yen has risen 10 percent against the dollar in the past 12 months. It reached a postwar record of 75.95 on Aug. 19, even after authorities intervened Aug. 4 in the foreign-exchange market for the first time since March to slow its gains, selling ¥4.51 trillion ($59 billion), the Finance Ministry said on its website Thursday in Tokyo.

Noda, who served as departing Prime Minister Naoto Kan’s finance minister, should reverse Japan’s “simple, close-minded” approach to the currency markets, said Gyohten, 80, who was vice finance minister for international affairs from 1986 to 1989.

“Even if you intervene, nothing really changes,” said Gyohten, president of the Tokyo-based Institute for International Monetary Affairs. The yen has risen about five times versus the dollar in the 40 years since the Nixon shock in 1971, when U.S. President Richard M. Nixon abandoned the gold standard, he said.

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