The Economy: Japanese Officials Vow to Fight Any Excessive Surge in the Yen; Nation's Manufacturers Warn Tokyo of Problems Fueled by Dollar's Plunge
TOKYO -- As Japanese manufacturers voiced concern over the dollar's plunge, government officials reiterated their resolve to fight an excessive yen surge.</br></br>The policy makers fired a round of verbal intervention after Japan's suspected direct yen-selling in foreign-exchange markets Monday failed to stop the dollar from setting a 40-month low of 106.07 yen. "There is no change to our stance in that we will take proper action when the market moves rapidly," Finance Minister Sadakazu Tanigaki said.</br></br>His top currency deputy, Vice Finance Minister for International Affairs Zembei Mizoguchi, said further yen gains against the dollar are unwarranted in light of economic fundamentals. "The U.S. economy is strong, and the foreign-exchange market, sooner or later, is going to reflect that," Mr. Mizoguchi said.</br></br>Tokyo has struggled for months to fight the dollar's decline against the yen, fearful that further falls could throw cold water on Japan's economy, which some economists say is finally emerging from a recession. A strong yen hurts exports, one of the main drivers of Japan's recovery, by making them less competitive overseas. It also hits corporate profits by reducing the yen-value of manufacturers' overseas earnings.</br></br>"We must beware of a further strengthening of the yen," Sony Corp. Chief Executive Nobuyuki Idei said at a New Year's gathering of Japanese business leaders, expressing concern that the dollar's weakness could threaten U.S. and global growth.