Yen weakens as ‘currency war’ rhetoric heats upComment on this story
Tokyo - The yen weakened further in Asian trade on Monday as criticism of the currency's slide heats up, with some warning that Tokyo's foreign-exchange policy could spark a global currency war.
The dollar bought 91.01 yen in Tokyo, up from 90.87 yen in New York on Friday, while the euro was at 122.46 yen from 122.28 yen.
The single currency was also at $1.3456 from $1.3457.
The Bank of Japan (BoJ) on Tuesday announced an open-ended easing plan and a two-percent inflation target to stoke growth, a move widely seen as bowing to political pressure.
The move led German Chancellor Angela Merkel to tell the World Economic Forum in Davos on Thursday that she as “not without some concern about Japan right now”.
And Angel Gurria, head of the Organisation for Economic Co-operation and Development (OECD), warned Japan was treading a “fine line” between defending its currency and putting trading partners at a disadvantage.
However, on Monday, Japan's Finance Minister Taro Aso rejected global concerns that Tokyo was orchestrating a slide in the unit.
“Japan's top priority is to pull out of a deflation-induced economic downturn, and the yen's decline is a consequence of it,” he was quoted as saying by Dow Jones Newswires.
“We didn't say anything when the dollar and the euro were being pushed lower.”
The yen hit record highs against the dollar in late 2011 - sitting around 75 to the greenback as the UD Federal Reserve embarked on its own monetary easing - and remained strong through much of last year, hurting exporters.
But the unit has tumbled in recent months as Japan's new conservative government pledged to stoke growth with big spending and by pressuring the BoJ for more easing measures.
Euro-buying sentiment got a boost from fresh data that showed Germany's business confidence rose to its highest level in seven months.
The European Central Bank said eurozone banks would repay early about 137 billion euros ($184 billion) in emergency liquidity loans, a sign of improved health for the 17-nation bloc's financial sector.
Markets would also keep a close eye on a key US jobs report and Federal Reserve policy meeting this week, after the central bank said it would not tighten monetary policy until the unemployment rate fell to 6.5 percent.
The US jobless rate is around 7.8 percent. - Sapa-AFP