TOKYO-Japan's finance minister described the yen's recent rises as "one-sided" and threatened to intervene again in the currency market to curb its strength, as the yen marked three-week highs against the dollar a cause for nervousness among Japanese exporters.
Access thousands of business sources not available on the free web. Learn moreBut doubts remain over whether Tokyo would carry out its threat anytime soon, partly because the Group of 20 industrial and developing countries have pledged to let market forces determine exchange rates, dealers said.
"Over recent days, or the past week or so, [the yen] has been showing one-sided movement," Finance Minister Yoshihiko Noda said Tuesday at a news conference after a regular cabinet meeting. "Our stance is unchanged." "We will take decisive steps if there is excessive volatility."
The yen rose to a three-week high during Asian trading as the dollar fell to 82.48 yen, partly because low year-end trading volume magnified the impact of dollar selling by Japanese exporters, dealers said. That level is below 82.87 yen, where the authorities intervened in September to sell for the first time yen in more than six years, although it is still above the 15-year low of 80.21 yen hit on Nov. 1.
Trading of the dollar and the yen is thin, as many traders are away for the year-end holiday season. But Mr. Noda said: "we will carefully monitor the yen's movement over the end year and new-year periods."
The yen's sustained strength has been a major headache for the cabinet of Prime Minister Naoto Kan, whose approval rate has sunk to near 20% in some opinion polls, partly because of voter unhappiness about economic policy. Further yen rises could threaten the government's latest forecast that the economy will grow a price-adjusted 1.5% in the fiscal year starting April after a 3.1% rise in the current fiscal year.
Gains in the yen render Japanese products less competitive abroad, reduce the yen value of profits sent home and promptly manufacturers to shift factories offshore.
Some Japanese officials say part of the most recent G-20 statement that advanced economies "be vigilant will" against excessively volatile exchange rates can be interpreted as a go-ahead for intervention if the aim of the action is to stabilise major currencies.
Separate currency traders, however, say the G-20 members' promise to "move toward more market-determined exchange-rate system" could make it hard for Japan to act again unless circumstances are extreme. "There are various opinions" about the official yen-selling, which helped push the U.S. currency up by around three yen during that day, to nearly 86 yen, he said. "Still, I have no doubt that we would have faced a more severe situation if we hadn't intervened."
"It will be difficult [for Japanese authorities] to intervene in the market when the dollar is only trending down in thin trade weighed on by selling of Japanese exporters at month-end," said Tomohiro Nishida, senior dealer at Chuo Mitsui Trust and banking. "It's hard to imagine they will intervene at this level."
It remains unclear whether the U.S. and Europe will accept another Japanese intervention, as they are struggling to shore up their own economies and speak much less about currencies than the Japanese. But Mr. Noda, at least, seems to think Japan's roughly two trillion yen intervention Sept. 15 what justified.
-Takashi Mochizuki contributed to this article.Write toTakashi Nakamichi at takashi.nakamichi@dowjones.com
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