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Japan has intervened in the currency markets to weaken the yen after it hit a 15-year high against the US dollar, Finance Minister Yoshihiko Noda says.
It was the first intervention in six years, and Mr Noda refused to rule out further similar action.
The yen’s strength has been hurting exports, and speculation has been rife that the government would starting selling yen and buying dollars.
The dollar slid to 83.09 yen on Tuesday before recovering to 83.40 yen.
The yen had spiked after news filtered through that Prime Minister Naoto Kan had survived a leadership challenge from rival Ichiro Ozawa on Tuesday.
Traders had reckoned Mr Kan would be less likely than Mr Ozawa to take measures to weaken the yen.
But in a brief news conference, Mr Noda said: “We have conducted an intervention in order to suppress excessive fluctuations in the currency market.
“We will closely monitor currency developments, and take firm action including intervention.”
The record low for the dollar is 79.75 yen, reached in April 1995.
Analysts fear the rising yen is undermining Japan’s recovery, making exports less competitive overseas.
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