The dollar, weakened by the dimming U.S. economic outlook, fell as low as 76.29 yen Monday. It hit a record post-World War II low of 76.25 yen in the days following the March 11 earthquake and tsunami. [break]
It was trading at around 78 yen immediately after Japanese finance authorities on Thursday morning bought dollars and sold the yen. It later reached the 79 yen level.
Finance Minister Yoshihiko Noda said the intervention was taken because the strong yen could hurt the economy and slow Japan´s efforts to recover from the disasters.
"The one-sided rise of the yen could have a negative impact," Noda told reporters. "We have decided to intervene."
Noda did not specify the amount of the intervention.
A strong yen is painful for Japan because it reduces the value of foreign earnings for companies like Toyota Motor Corp. and Nintendo Co. and makes Japanese goods more expensive in overseas markets.
The yen´s surge after the March disasters prompted the Group of Seven major industrialized nations to work together to weaken the Japanese currency. Officials feared that the fast rising yen would exacerbate the economic impact of the disaster.
That coordinated intervention in international currency markets was the first by the G-7 countries since the fall of 2000, when the G-7 intervened to bolster the euro.
Japanese companies that based their earnings forecasts on assumptions of weaker yen may be forced to downgrade expectations if yen strength persists. Nintendo, for example, assumes 83 yen to the dollar this fiscal year through March 31. About 80 percent of the video game and console maker´s sales are outside of Japan.
The yen´s resurgence after the effects of G7 action dissipated had recently triggered speculation in financial markets that Japan might once again intervene — this time alone — by selling the yen. As the yen dipped to the low 77s Thursday morning, Noda made his announcement that Tokyo had decided to act.
Related story
The importance of woman in STEM
