Japan to keep acting on rapid yen moves

Japan will keep acting against rapid and speculative moves in foreign exchange markets, Japanese Finance Minister Sadakazu Tanigaki said on Saturday, a day after suspected intervention to curb the yen's rise.
Tanigaki said in a speech in Osaka, western Japan, that the yen's recent rise was one of the government's greatest concerns.
"Foreign exchange stability is crucial. We must act appropriately against rapid and speculative moves, or overshooting," he said. "We will keep on acting in line with that view."
Tokyo spent about 20 trillion yen ($187 billion) last year to rein in the yen. Japan worries a stronger currency will damage exports, the main engine of the country's fledgling economic recovery.
Traders said authorities probably intervened again on Friday after the yen jumped to three-year highs of around 105.70 per US dollar. It ended the week at around 106.80 yen per dollar.
The weakening US dollar weakness is likely to dominate a meeting of Group of Seven finance officials in Florida on February 6-7. Tanigaki said economic fundamentals did not warrant a fall in the dollar, but that it was being sold anyway because of worries over global security and the US trade and fiscal deficits.
"Looking at global conditions, the US economy is the strongest. Conditions don't call for continued weakness in the dollar," he said. "But markets have been concerned about the twin deficits, and after September 11 there have been fears about terrorism. There are also views that US authorities, while they may not say so, really want a weak dollar during an election year."
Tanigaki said European authorities were beginning to share Japan's concerns over the dollar's weakness.
The euro touched a record high on Monday at $1.2898 before European Central Bank President Jean-Claude Trichet warned against "brutal" moves.
"European politicians had originally been wary of the dollar's weakness but European central bankers had not necessarily shown as much concern. But with the euro marking record highs, officials including Trichet have expressed concern," Tanigaki.