Intervention hints fail to halt yen

“In the end, we will take decisive measures including intervention when needed.”

The remarks indicated a shift in Noda's language. Previously he has repeatedly declined to comment on intervention when asked about it by the media.

The government will make necessary preparations for intervention, which should be conducted in the most effective way possible, Parliamentary Secretary of Finance Hiroshi Ogushi said.

Meanwhile Ozawa told reporters Japan should intervene and sell the yen even if solo action was likely to be ineffective. He had said last week Japan should be prepared to act on currencies.

“They are trying to talk as much as they can, but we think actual intervention is unlikely because other G-7 countries wouldn't cooperate,” said Thomas Harr, head of Asian foreign exchange strategy at Standard Chartered in Singapore.

“The most likely outcome is more easing from the BOJ, which may be some measures to lower short-term interest rates.”

Kan has vowed to take firm measures against currencies when needed in a plan to boost jobs and the economy.

Japan has not intervened in the currency market since March 2004, after spending 35 trillion yen (US$420 billion) over a 15-month period to support an economic recovery.

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