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Japan Reveals Stealth Yen Intervention, Ready to Do More

Reuters
Monday, 6 Feb 2012 | 7:58 PM ET
Don Farrall | Photographer's Choice RF | Getty Images

Japan will not rule out taking any measures to battle speculative moves in currency markets, Finance Minister Jun Azumi said on Tuesday, after data showed Tokyo spent roughly 1 trillion yen ($13 billion) in November last year on intervention it had not previously announced.

"If speculative moves become evident and market moves deviate from economic fundamentals, and speculators distort markets in their self interest, I'll take any steps if necessary in order to protect Japan's national interest," Azumi said.

"As I said back then (when Japan last intervened), I would not rule out any measures," he told a news conference after a cabinet meeting, issuing a strong warning to markets against pushing up the yen too much.

Japan spent 8 trillion yen intervening unilaterally in the currency market on Oct. 31 to prevent the yen's sharp rises from hurting the economy, and announced the move the same day.

Tokyo followed up that move by selling roughly 1 trillion yen ($13.05 billion) in stealth intervention, from Nov. 1-4, Ministry of Finance data showed on Tuesday. The data also showed that Tokyo did not intervene in euro/yen during the quarter.

Policymakers in Japan are concerned that the yen's persistent strength could further weaken exports and may derail the country's fragile recovery from the damage wrought by last year's earthquake and tsunami.