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Rising yen concerns businesses and Japan’s Finance MinistryDate Posted: 2011-08-12 The Japanese yen’s trading in the ¥77.87 = $1 range this week, only days after the Japanese government intervened and sold yen to stabilize rates. The yen dropped 4.1% for a couple days, falling to ¥80.24, but the effort is not proving enough. Japan’s move for the second time this year to stabilize its currency has brought pledges from Group of Seven authorities who say they’ll “cooperate as appropriate” on actions in currency markets. An almost doomsday-scenario’s being painted by a former Finance Ministry official, Eisuke Sakakibara, who’s predicting Japanese government actions will prove ineffective and the yen will “strengthen beyond 70 for the first time”. Sakakibara, who picked up the “Mr Yen” moniker during his late 1990s tenure as the Finance Ministry’s top currency official, is bluntly predicting the yen will trade around ¥73 = $1 by the end of the year. Only a month ago, he’d predicted a rise to ¥75 = $1 but says the Japanese currency is building momentum. The stronger yen tends to make Japanese competitiveness weaken as exporters’ overseas earnings are impacted. The president of Mitsubishi Motors, Osamu Masuko, is calling for more action, saying last week’s currency tweaking as “still isn’t acceptable”. The U.S. economic woes, including the downgrading of America’s credit rating by S & P, have already left Japan with ¥30 trillion in losses that will pressure the Japanese government as it weighs how much to support America while protecting its own economy. |
   
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