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Yen slips as Japanese officials move to stem rally

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The dollar bought 120.24 yen, compared with 120.54 yen in New York where it at one point earlier it broke 121 yen (AFP Photo/Kazuhiro Nogi)

The dollar bought 120.24 yen, compared with 120.54 yen in New York where it at one point earlier it broke 121 yen (AFP Photo/Kazuhiro Nogi)<br />

The yen slipped Monday as Tokyo officials kept up their war of words in a bid to tame the surging currency, while the dollar won support as weak US jobs data failed to extinguish hopes for rate hikes this year.

Prime Minister Shinzo Abe and other Japanese officials have been warning over a possible market intervention to cut short the “speculative” rally that has seen the yen soar to 18-month highs against the greenback.

“Our position is that wide fluctuations and rapid movements are not desirable as they can cause various impacts as far as trade policies and fiscal policies are concerned,” Finance Minister Taro Aso said Monday in his latest comments on the issue.

“We have always said, in these situations that we are prepared to intervene” in the market, he told parliament.

Last week, Abe said on a visit to London that “drastic fluctuations” in the yen’s value risked having a major negative impact on Japanese companies.

Japan last intervened in currency markets around November 2011, when it tried to stem the yen’s rise against the dollar to keep an economic recovery on track after the quake-tsunami disaster earlier that year.

“The yen likely saw its peak against the dollar for the time being,” Koji Fukaya, the Tokyo-based chief executive officer at FPG Securities, told Bloomberg News.

“The jobs report failed to add further momentum to speculators’ already bullish yen positions. Unless US data falter, the yen lacks fresh incentives to climb,” he said.

The much-anticipated monthly report, released Friday, put April’s job gains in the US at by far the weakest level of the year at 160,000, compared with the market’s expectation for 200,000.

Still, the dollar held its ground, buying 107.39 yen, firming from 107.14 in New York Friday, as a key Fed policymaker said he expected continued growth in the US economy.

A stronger economy would support the case for more rate hikes which, in turn, tend to lift the greenback as investors seek out dollar-denominated assets.

The euro strengthened to $1.1412 and 122.56 yen, from $1.1403 and 122.17 yen in New York, after Greek lawmakers adopted a controversial package of pension cuts and tax hikes as eurozone finance ministers geared up for an emergency meeting Monday to hammer out fresh reforms for Athens to stave off another debt crisis.


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