Vol. 5 Num 694 Sat. May 13, 2006  

Japan sounds alarm on rapid yen rise

Japan's government showed growing concern Friday at the recent rapid appreciation of the yen, with ministers warning it would undermine economic growth and corporate profits.

"The rapid fluctuation is not desirable. It could affect companies," Finance Minister Sadakazu Tanigaki told reporters, according to Jiji Press.

A stronger yen undermines the competitiveness of Japanese exporters and reduces the value of their repatriated overseas earnings.

Chief Cabinet Secretary Shinzo Abe, the government's top spokesman, also voiced concern.

"Foreign exchange rates should reflect economic fundamentals," Abe was quoted as saying by Jiji.

"We think the excessive volatility is undesirable for the economy and we want to carefully monitor market movements," he said.

The remarks came after the dollar fell below 110 yen briefly in Asian trade Friday for the first time for eight months on renewed speculation that the US Federal Reserve could soon pause in its series of interest rate rises.