The yen rose on Wednesday after Japanese Prime Minister Shinzo Abe voiced concern about the economic impact of its fall to a six-year low, adding to the sense of a halt this week in the dollar’s record-breaking run since July.
The dollar slipped 0.3 percent on the day to 108.55 yen after the Jiji news service quoted Abe as saying he would carefully watch the impact of the yen’s recent weakness on Japanese regional economies.
The prime minister’s comments follow similar expressions of concerns from two of his ministers after a drop of roughly 7 percent since early August which took the yen to a low of 109.46 yen per dollar last Friday.
Much as that seems broadly part of Abe’s plan to refloat the Japanese economy by spurring inflation, market players said the pace may not be so easy for policy makers to digest.
“It seems to us – and I think most people – that it’s not the fact of the move, just the pace of it that Tokyo is concerned about,” said a spot dealer with one large international bank in London.
“(But) it is not a surprise that we’re seeing the yen show some resistance at the moment, given the slight pullback we’ve seen on the dollar in the last few days.”
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