Yen tumbles further in Asia

Yen tumbles further in Asia

TOKYO - The yen weakened against major currencies in Asian trade Friday, as Japan's finance minister rejected claims that its loosening of monetary policy could spark a global currency war.

The yen dropped to 90.51 yen against the dollar in Tokyo against 90.40 yen in New York, while the euro fetched 120.96 yen compared with 120.91.

The euro bought US$1.3362 compared with $1.3376 in New York.

Finance Minister Taro Aso on Friday said claims that Tokyo was orchestrating a slide in the yen were wrong, a day after German leader Angela Merkel voiced concern over the new government's exchange rate policy.

"The criticism that (the government) is manipulating the currency rate is completely off the mark," Aso was quoted as saying in the online edition of the leading Nikkei business daily.

On Tuesday, the Bank of Japan (BoJ) announced an open-ended easing plan and a two-per cent inflation target to stoke growth in the deflation-plagued economy. The move was widely seen as the BoJ bowing to political pressure.

Aso's comments were the latest in a simmering row over Japan's currency, with critics saying Tokyo's pressure on the central bank for aggressive policy action amounted to meddling that could spark a global currency war.

Jens Weidmann, the head of Germany's Bundesbank, as well as the head of the US Federal Reserve Bank of St. Louis and a Russian central banker have all warned that a currency war could be a consequence of the yen's steep tumble.

In an interview published Thursday with Japan's Takehiko Nakao, vice minister of finance for international affairs, saying it had no truck with accusations that it was trying to get an upper hand on other countries.

Japan should not be criticised if well-intentioned monetary policy "has a certain impact on exchange rates as a consequence", he said.

The dollar was mostly stronger against other Asia-Pacific currencies, rising to 9,778 Indonesian rupiah from 9,755 rupiah on Thursday, to 1,074.05 South Korean won from 1,067.04 won, to 29.89 Thai baht from 29.83 baht, and to Tw$29.19 from Tw$29.02.

The greenback also gained to S$1.2306 from S$1.2274, and 40.70 Philippine pesos from 40.62, while easing to 53.69 Indian rupees from 53.85 rupees.

The Australian dollar weakened to $1.0449 from $1.0522, while China's yuan fetched 14.54 yen from 14.31 yen.

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