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Yen slips on finance minister comments

Jan 30 2013 07:56 AFP

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Tokyo - The yen slipped further on Wednesday after Japan's finance minister issued a stern denial over claims Tokyo was manipulating the unit, as traders keep an eye on a Fed meeting that wraps up later in the day.

In morning Tokyo trade, the dollar gained to ¥90.97, from ¥90.72 in New York on Tuesday, while the euro fetched ¥122.75, from ¥122.42.

The single currency also bought $1.3491 from $1.3493.

Japan's currency resumed its months-long slide as Finance Minister Taro Aso said the unit was in a "correction phase" after soaring to record highs around 75 to the dollar in late 2011.

"The comment is nothing new so it can't push up the (dollar/yen) pair like a rocket anymore, but it still has some power left," a senior dealer at a major bank in Tokyo told Dow Jones Newswires.

On Tuesday Japan's economic revitalisation minister Akira Amari said the currency's slide was a product of Japan's new government trying to boost the deflation-plagued economy with big spending and a pressure campaign on the Bank of Japan for aggressive easing.

That has stoked criticism - including from German Chancellor Angela Merkel and Angel Gurria, head of the Organisation for Economic Cooperation and Development (OECD) - that Tokyo is manipulating its exchange rate policy.

Forex markets were looking to the US central bank as it wraps up a two-day meeting later in the day, hoping for more clues to the state of the economy.

While no major new decisions are expected, the meeting is its first since December when the Fed expanded its bond-buying programme and set explicit unemployment and inflation targets for raising interest rates.

Notes from that meeting showed increasing concerns over inflation, so analysts will be looking for any nuance on its view of the state of the world's biggest economy.

Data out of the US on Tuesday showed consumer confidence was weaker than expected but prices continue to recover in the battered housing market.

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japan  |  markets  |  yen
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