Japan finance minister's comment sends yen rallying

PHOTO: Japan finance minister's comment sends yen rallying

TOKYO - Japan's Finance Minister Taro Aso said Friday the yen's recent tumble against the dollar was something unexpected, a comment which immediately led to a rally in the Japanese unit.

Aso told the lower house budget committee: "The exchange rate has abruptly reached the 90 yen level from its previous 78-79 yen level in a manner we didn't anticipate," according to Japanese media.

Following the comment in the afternoon, the dollar slid to 92.17 yen from a morning high of 93.75 yen.

But a Japanese finance ministry official later clarified Aso's remark by saying he had meant to say the yen's recent fall had been "fast-paced" rather than unexpected, according to Dow Jones Newswire.

The official declined to make any further comment, apparently out of concern that further clarification would be taken as an attempt to talk down the yen, the report said.

Aso was commenting on the economic drive by Japan's new conservative government of Prime Minister Shinzo Abe, which swept to power in December, to ease monetary policy, increase public spending and strive for economic growth.

"The Abe government is the first in 20 years to move these three (elements)," helping an upsurge in share prices, the finance minister said, according to Japanese media.

The yen has tumbled about 10 per cent against the dollar since Abe took office in late December, sparking criticism that Japan was attempting competitive devaluation of its currency.