Japanese officials warned markets Tuesday that Tokyo was keeping a close eye on the Yen currency, and would act together with its Group of 7 partners if necessary. The Yen is flat against the dollar this morning, trading at 81.11.
The Yen has recently backed off its record high of 76.25, reached last week after the earthquake and ensuing tsunami.
According to a Reuters report, “In their first joint intervention since 2000, Group of Seven rich nations sold the yen on Friday after it spiked to record highs, threatening to cripple Japanese exports and deal another blow to an economy reeling from the disaster.”
“We will cooperate as appropriate while closely watching market movements,” Finance Minister Yoshihiko Noda told reporters.
Some traders see the Yen’s strength coming from speculation that Japanese companies will bring back investment to reconstruct the damaged nation.
The CurrencyShares Japanese Yen Trust (NYSE: FXY), which reflects the Yen’s price against a basket of currencies, closed Monday at $121.86, lower by 0.36%.
The Japanese government has not given its estimates of the damage, but Yosano told Reuters last week the total impact could exceed 20 trillion yen ($247 billion).