Bank of Japan Gov. Masaaki Shirakawa said Monday that the Group of Seven major nation’s pledge of joint foreign currency intervention to curb the yen’s surge in the days after a massive earthquake and tsunami on March 11 was key to limiting financial market damage.
“Coordinated foreign exchange market intervention by G-7 countries played a critical role in not only stabilizing the foreign exchange market, but also helping to prevent negative spillovers into other markets, for example Japan’s stock market,” Shirakawa said in a speech in Tokyo on Monday evening.
The yen has weakened since the G-7 pledged joint intervention and Japan’s Ministry of Finance conducted yen-selling intervention on March 18. The dollar traded around Y84.63 Monday evening in Tokyo, up sharply from the post World War II-low of Y76.25 hit on March 17.
A weaker yen helps Japan’s key manufacturing sector by making exports less expensive overseas and boosting overseas revenue sent back to Japan.