The dollar eventually clawed back most of its losses against the yen, but pundits forecast the Japanese currency will continue to look attractive to investors shaky at financial instability in the United States and Europe.
High evaluation of the yen raises the global marketplace price of Japanese exports and threatens Japan’s economic recovery. However, the yen and Swiss franc in particular have received considerable funds from investors who view them as stable currencies amid the uncertainty surrounding the dollar and euro.
Recently appointed Vice Finance Minister for International Affairs Takehiko Nakao said Aug. 19 that he doesn’t “think recent yen moves really reflect economic fundamentals.”
Nakao denied Japan would intervene to influence the value of the yen.
“We don’t have plans to intervene,” he told Dow Jones Newswires in an interview. “We don’t use intervention as a daily tool.”
The previous high of 76.25 yen to the dollar was recorded on March 17, just days after the earthquake and tsunami devastated much of the Tohoku Region and triggered the Fukushima Daiichi meltdowns and ongoing nuclear crisis.