The yen plunged briefly against the dollar on Friday, spurring market talk that Japan intervened again after a massive campaign the day before to tame the currency, but there was no official confirmation of government action. The dollar briefly jumped nearly a full yen to around 79.40 with dealers citing government action, but it quickly ceded ground raising doubts among dealers as to whether authorities had intervened or not. A Finance Ministry official declined to comment.
Japan intervened in the currency market on Thursday and eased monetary policy to ease pressure on the export-reliant economy after the yen surged close to a record high this week as investors bought it as a refuge from the fiscal and economic woes in Europe and the United States. Earlier on Friday, Finance Minister Yoshihiko Noda repeated that he was closely watching yen moves, signalling readiness to continue taming the yen after Thursday's intervention that media said reached a record 4 trillion yen ($50.6 billion).
"There's no change to our basic stance that we want to monitor markets closely. It's better to wait for a little while before judging the impact of intervention," Noda told a news conference. But Noda also said he wanted to spend more time determining the effect of Tokyo's action, a comment which briefly pushed up the yen against the dollar as market players interpreted it as a sign Tokyo may hold off intervention in the near future.
The dollar briefly rose above 80 yen on Tokyo's solo intervention on Thursday but has since fallen back to around 78.60 yen. Noda offered no sign that G7 or G20 financial officials are considering discussing the global slowdown and market instability, or whether Tokyo may be initiating such discussions. "I agree that these subjects should be discussed. We have the G20 meeting in September. I am sure these subjects will come up at a lot of international meetings," Noda said. Japan probably sold a record 4 trillion yen ($50.6 billion) in an intervention on Thursday, nearly double the amount in the previous solo effort in September 2010, the Nikkei newspaper reported on Friday.