Japan unveils new measures to deal with strong yen

TOKYO: Japan's finance minister unveiled steps on Wednesday to combat the rise of the yen, which threatens to undermine the recovery of firms following the March earthquake and tsunami.

Yoshihiko Noda announced a $100 billion facility to help weaken the yen after the unit last week hit a post-war high against the dollar on safe haven demand amid global economic fears.

The programme would encourage firms to exchange the Japanese currency for foreign denominated assets, with the one-year facility aimed at encouraging merger and acquisition activity to make the most of the strong yen.

The package will also see the finance ministry strengthen its monitoring of the foreign exchange markets, requiring dealers to report trading positions through to the end of September.

The dollar briefly fell on the news, dropping to 76.53 at one point before paring its losses. It stood at 76.65 yen at 0315 GMT.

Copyright AFP (Agence France-Presse), 2011