Yen hits record
JAPAN pumped more funds into its shaky financial system after stocks fell and the yen surged to a record high, which Tokyo blamed on currency speculators foll owing t he huge earthquake.
The central bank injected another Y6 trillion ($ A79.14 billion), increasing to Y34 trillion ($ A448.46 billion) the total funds added to money markets since Monday to soothe jitters after l ast week’s devastating quake and tsunami.
Finance chiefs from the G7 rich nations were set to hold telephone talks on the crisis yesterday, as market talk grew that Japan might be preparing measures to rein in the soaring yen.
‘ ‘ There i s i ntensifying market s p e c ul a t i o n t he Bank of Japan will soon intervene to cap support of the yen,’’ said NAB Capital analyst David de Garis.
Dealers said some market players appeared to be buying the yen on expectations that Japanese companies would repatriate funds to pay for reconstruction.
S u c h s p e c u l a t i o n i s ‘‘ totally groundless’’, said Economy Minister Kaoru Yosano, adding the yen’s s u r g e w a s ‘ ‘ e x t r e m e l y speculative’’.
French Finance Minister Christine Lagarde, who c a l l e d t h e G 7 t a l k s , suggested financial assist-
RECOVERY MODE: Japan is looking to restore the value of the yen after the earthquake ance may be extended.
The International Monetary Fund, however, said Tokyo had not asked for IMF help and had the resources to cope with the disasters.
‘ ‘ We b e l i e v e t h a t t h e Japanese economy i s a strong and wealthy society and the government has the full financial resources to address those needs,’’ IMF s p o k e s wo ma n C a r o l i n e Atkinson said.
Investors welcomed news t h a t a r m y h e l i c o p t e r s dumped water on the crisishi t Fukushima nucl e a r power plant in a bid to douse radioactive fuel rods as part of efforts to prevent a release of radiation.
Stocks recovered some of their early losses to end down 1.44 per cent, having sunk more than four per cent in early deals.
Tokyo’s Nikkei share index suffered the biggest two-day sell-off for 24 years on Monday and Tuesday, plunging 16 per cent, amid the world’s worst nuclear crisis since Chernobyl Ukraine in 1986.
The yen struck a record high of 76.52 per US dollar in early Asian trade, but later pulled backed, easing worries about the impact of a strong currency on exports. The yen was quoted at 78.34 against the greenback in European trade.
J a p a n e s e o f f i c i a l s d e - clined to comment on the possibility of intervention, but their silence did nothi n g t o d a mpen marke t speculation.