Sakakibara Says Yen May Rise to Record Against Dollar by End of This Year
Eisuke Sakakibara, formerly Japan’s top currency official, said the yen may rise to a record 79.75 against the U.S. dollar due to concerns over the health of the U.S. economy.
“What we are seeing is not appreciation of the yen but weakness of the dollar, reflecting concerns that the U.S. economy may falter,” Sakakibara said on the Fuji television network. “There is a chance the yen will reach an all-time high and stay at that level for the time being.”
The yen peaked at 79.75 to the dollar in April 1995.
Japanese Prime Minister Naoto Kan said he’s “concerned” about the recent appreciation of the yen, Kyodo News reported yesterday. Kan spoke at a hotel in a mountain resort in central Japan’s Nagano prefecture.
Kan and Bank of Japan Governor Masaaki Shirakawa may meet this week to discuss measures to address the yen’s strength, the Asahi newspaper reported on Aug. 13, without citing anyone. The currency reached 84.73 to the dollar on Aug. 11, the strongest since July 1995.
“Japanese companies will feel the pinch of a stronger yen and a weakness in share prices around the end of this year,” Sakakibara said.
Sakakibara became known as “Mr. Yen” during his 1997-1999 tenure at the Ministry of Finance for his efforts to influence the yen’s exchange rate through verbal and actual intervention in the currency market.
He correctly predicted in November 2008 that the yen would strengthen beyond 90 to the dollar because of the banking crisis. Sakakibara is now a professor at Aoyama Gakuin University in Tokyo.
To contact the reporter on this story: Yasuhiko Seki in Tokyo at yseki5@bloomberg.net
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