Japan sharpens warning as yen nears record

TOKYO: Japan sharpened its warning to currency markets yesterday in the wake of the yen's rise near-record highs against the dollar, keeping markets jittery about the possibility of a second round of intervention.

Markets are also on guard after the Swiss National Bank said it would flood the market with even more francs to dampen demand for its currency, which like the yen is soaring on safe-haven demand.

“We are keeping an extremely close watch on currency moves, while working closely with the global community,” Finance Minister Yoshihiko Noda told parliament, issuing a stronger warning than his usual phrase that he was watching markets carefully.

Prime Minister Naoto Kan also told parliament the government would consider what it could do to address what he saw as “somewhat onesided moves” in the yen, although he would probably not see through any such measures as he had signalled his intention to step down in the coming weeks.

Japan has kept firing warnings to markets against pushing up the yen too much, but that has not kept the currency from rising past levels that triggered last week's intervention.

The yen soared within sight of its record high of 76.25 yen to the dollar, hit just after the March 11 earthquake, as investors sought refuge from risk amid heightening uncertainty over the global economic outlook.

In a sign of how jittery markets are at the possibility of intervention, the dollar briefly jumped above 77 yen in London trading hours after approaching its record low against the yen.

Traders said they had not seen any yen-selling intervention by Japanese authorities and the dollar soon fell back to around 76.50 yen. Reuters