The dollar fell to its lowest level against the yen in the last four months. Prolonged settlement of U.S. government debt is expected to be one cause. Especially yesterday, Central Bank Governor Ben Bernanke hinted the country's economic growth will slow down. "I'll see continued movement of the money market," said Noda told reporters in Tokyo, Thursday, July 14, 2011.
The rise of the yen is expected as investors seek safe to the worsening debt crisis of the European and American economic recovery doubts. "The Japanese government increasingly worried about how much the currency will strengthen," said Makoto Noji, currency strategist and Senior Bonds at Nikko Securities SMBC in Tokyo.
Rise of the yen has triggered a series of warnings from Japanese officials. It is estimated that in the near future the government will intervene against the market.
"Japan's intervention may not succeed, because we have a very negative news about the United States and Europe," said Kimihiko Tomita, head of foreign exchange at State Street Bank & Trust in Tokyo.
G7 group of countries jointly intervene to stem the yen's strength as the Japanese currency soared to a record high at 76.25 per dollar position of the United States after the earthquake last March. Speculation is mounting that Japanese companies will repatriate most of their foreign assets to pay for reconstruction.
The last time Japan intervened in the market in September last year. It was done by the government for the first time in six years. But conditions are different now. With the economy had recovered after the disaster, Tokyo would intervene in the market difficulties.