Japanese government is getting jittery about possible intervention

Intervention could be on the horizon – With the Japanese yen edging closer to the level of 85 yen to the U.S. dollar, government officials in Tokyo are beginning to sweat. According to news reports, Foreign Minister Yoshihiko Noda today expressed concern over the impact of a stronger yen on Japanese exports. Prime Minister Naoto Kan said he was keeping a close eye on developments. Experts have suggested the danger level – when some sort of government intervention is likely – is somewhere between 80 to 85 yen against the USD. Some forex analysts think the point of no return, when it comes to government intervention, could come if the dollar sinks to 84.82 yen, a level last seen in November 2009. At press time (10:10 a.m. in New York), the dollar was trading at 85.805 JPY.

Signs of an economic bounce help the euro – Confidence in the European economy has been a driving force in pushing up the euro against the U.S. dollar on the forex market today. The euro has been floating around 1.32 USD during the course of trading. The rising euro is a “sign of the growing strength” of the European economy, Lord Leon Brittan, vice chairman of UBS Investment Bank and a former vice president of the European Commission, said during an interview on Bloomberg News. Volatility of the currency, when compared to its relative levels of strength, is a great deal harder to deal with, he said. Policymakers do not have a target level for the euro that would prompt some sort of action, Brittan said, adding that, in any case, no action would be taken regarding the exchange rate alone.