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Saturday, Feb 11, 2012
AFP
Anger in Japan as minister reveals intervention rate

TOKYO - Japan's finance minister has been accused by opponents of breaking a national taboo after he revealed the level at which the government intervened in currency markets last year to weaken the yen.

Jun Azumi told a lower house budget committee meeting on Friday that he gave the order to intervene when the yen hit 75.63 against the dollar as he feared without government action the economy would fall into a "critical situation".

Despite his rare remarks, the exchange rate remained stable at around 77.60 yen to the dollar.

Opposition leaders strongly criticised Azumi for the disclosure.

"I was surprised," Nobuteru Ishihara, secretary general of the main opposition Liberal-Democratic Party, told reporters late Friday.

"The exchange market is where dealers buy and sell with the (intervention) level in mind... A finance minister should never talk about (specific) rates. That's a basic rule."

It is widely regarded as a taboo in Japan for monetary officials to mention specific exchange rates that could be taken as a threshold for market intervention.

Japan sold a total of about nine trillion yen ($116 billion at current rates) to weaken the currency's value for five days from October 31 when the Japanese currency hit a postwar high of 75.32 to the dollar.

Responding to questions from an opposition lawmaker about the intervention at Friday's meeting, Azumi said that the intervention was halted when the yen hit 78.20 to the dollar.

He added that the yen selling operation proved "effective to some extent" as the yen stabilised at the 77-78 range for the rest of the year.

Azumi defended himself later Friday after the meeting, saying he was simply reading rates that were shown to him on a board at the meeting.

 
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