Yen gains in Asia on Japan finance minister comments
AFPTOKYO--The yen rose in Asia on Tuesday after Japan's finance minister moved to reassure the central bank's independence, while also saying there were no plans to buy foreign bonds to drive up inflation.
February 20, 2013, 12:02 am TWN
The dollar slipped to 93.67 yen in Tokyo afternoon trade from 93.95 yen in London on Monday, while the euro was weaker at 125.02 yen and US$1.3348 against 125.43 yen and US$1.3353. U.S. markets were closed Monday for a national holiday.
Finance chief Taro Aso told a press briefing Tuesday morning that Tokyo had “no intention” of asking the Bank of Japan to buy foreign bonds as part of its monetary easing policy.
Such purchases could push the yen down, as the bank sells the currency to buy foreign bonds, and draw more anger from some critics, particularly in Europe, who have accused Tokyo of manipulating the yen's recent steep decline.
Japanese officials have repeatedly fended off the criticism, which has seen Tokyo accused of risking setting off a global currency war in which rival nations drive down their currencies to gain a trade advantage.
Aso's comments — which came a day after Prime Minister Shinzo Abe mentioned such a move — were “the sensible thing to say considering international norms,” said Daisuke Karakama, vice president of forex sales at Mizuho Corporate Bank.
Regarding the independence of the central bank Aso Tuesday said the new government was “not thinking about a law change at the moment.”
Abe had warned Monday he would “consider revising the BOJ law” if it could not deliver on its two percent inflation target outlined last month under political pressure.
The premier, who swept to power in landslide December elections, signaled he may rein in the Bank of Japan's independence if it fails to fall into line with his government's demands to boost the economy.
The dollar was mixed against other Asia-Pacific currencies, falling to 40.62 Philippine pesos from 40.65 pesos Monday, and to 54.20 Indian rupees from 54.33 rupees.