Japan's finance minister said he was closely watching yen moves on Friday, signaling a readiness to continue selling the currency after intervention on Thursday that likely totaled a record amount around 4.5 trillion yen ($56 billion).
Japanese authorities intervened on Thursday and the central bank eased monetary policy to reduce pressure on the export-reliant economy after the yen surged close to a record high with investors buying it as a refuge from the fiscal and economic woes in Europe and the United States.
There's no change to our basic stance that we want to monitor markets closely, Finance Minister Yoshihiko Noda said on Friday.
It's better to wait for a little while before judging the impact of intervention, he told a news conference.
Markets remained jittery.
The Japanese currency plunged nearly a full yen against the dollar at one point on Friday, spurring market talk that Japan had intervened again. It quickly bounced back, so traders said it was unlikely to have been the result of intervention. A Finance Ministry official declined to comment.
Earlier, a comment by Noda that he wanted to spend more time determining the effect of Tokyo's action briefly pushed the yen up against the dollar as market players interpreted it as a sign Tokyo may hold off intervention in the near future.
Of course, we have to watch currencies, but the Dow (industrial average) fell a lot, so today I also want to watch the stock market.
Thursday's intervention briefly pushed the dollar above 80 yen. It fell back to trade around 78.45 yen.
Money market data released by the Bank of Japan late on Friday showed that Japan's yen-selling intervention the previous day may have totaled a record amount around 4.46-4.66 trillion yen.
World stocks plunged to new lows for the year on Thursday with a sell-off in markets accelerating sharply as investors fretted about the outlook for the global economy and piled into safe-haven bonds. The overnight sell-off pushed the Nikkei share average <.N225> down sharply on Friday.
Noda offered no sign that financial officials from the Group of Seven or Group of 20 leading economies are considering discussing the global slowdown and market instability, or whether Tokyo may be initiating such discussions.
I agree that these subjects should be discussed. We have the G20 meeting in September. I am sure these subjects will come up at a lot of international meetings, Noda said.
Each problem is important, but how to prioritize these issues is something to discuss from here on, Noda said in response to questions on whether G20 needed to discuss currencies, the sovereign debt crisis and the U.S. economy.
Japanese officials have not been clear about whether they obtained consent from G7 counterparts to conduct solo intervention.
Asked about the cool reception of officials in Europe and the United States to Japan's intervention, Noda said: We are communicating, but I won't comment on each country's stance.
Economics Minister Kaoru Yosano warned markets on Friday that they should not assume that Tokyo is done with stepping into the market, while stressing again the need for Japan, Europe and the United States to adopt common policies to contain the pessimism about the global economy. ($1 = 79.020 Japanese Yen)
(Additional reporting by Rie Ishiguro; Writing by Tomasz Janowski; Editing by Neil Fullick and Michael Watson)