Japan 's authorities seen seeking to rein in dollar .
George Nishiyama
TOKYO 1996-12-06
Comments by Japan 's tight-lipped central bank chief and an influential top bureaucrat are further signs that the nation 's authorities want to keep the dollar at current levels , market sources said on Friday .
In a rare expression of a view on currencies by the Bank of Japan ( BOJ ) governor , Yasuo Matsushita was quoted in Japan 's leading economic daily on Friday as saying that he sees no further , immediate fall in the yen .
This followed a widely watched television appearance late on Thursday by Eisuke Sakakibara , a high-ranking Finance Ministry official , who denied he had said he wants to guide the dollar lower to between 108 and 110 yen .
But many in the market thought Sakakibara 's real intentions lay elsewhere , and took more notice of his comments about the U.S. government 's stance on the dollar , dealers said .
" I think his views on ( U.S. Treasury Secretary Robert ) Rubin 's comments were indeed what he himself thinks about the dollar , " said Hank Note , chief dealer at Sumitomo Bank .
Asked about Rubin 's comment that a strong dollar was in U.S. interests , Sakakibara said the remark does not necessarily mean the United States supports a stronger dollar .
" It 's a strong dollar , not stronger .
In that sense , the comments are not pointing to a certain direction , " he said .
" It shows that Sakakibara is not for a stronger dollar either , " said Sumitomo 's Note .
Takao Sakoh , first vice president at Union Bank of Switzerland in Tokyo , said : " Maybe a dollar at 104.50 yen is not acceptable ( to Sakakibara ) , but it may be okay at the current level , at the lower end of 112 yen . "
Market participants have kept a close eye on Sakakibara , chief of the ministry 's International Finance Bureau , as a comment he made in November after the dollar hit this year 's high of 114.92 yen pushed the currency down sharply .
He had said then that the market 's view on Japan 's economy was too pessimistic and that he believed it was stronger than the market thought .
Dealers have come to refer to 115 yen as the " Sakakibara ceiling " for the dollar following the remark .
Adding to the comments by " Mr Yen " , as Sakakibara is known for his prominence in the currency market , was BOJ governor Matsushita 's remark .
" The recent level of the yen exchange rate has been stable , and it does not appear to be moving towards a further depreciation of the yen immediately , so import prices are likely to stabilise at current levels , " Matsushita said in an interview with the Nihon Keizai Shimbun .
" The fact that he touched on the issue of inflation triggered by import prices shows that the BOJ does not want a further depreciation of the yen , past 115 yen , " said Yasuhito Kawashima , chief forex manager at Toyo Trust & Banking Co .
Some said the central bank may have been concerned a weaker yen would lead to unfounded pessimism about Japan 's economy .
" There was concern that foreign investors may sell Japanese stocks if the dollar goes above 115 yen .
The BOJ does not want the yen 's weakness to lead to pessimism over the economy , " said Taisuke Tanaka , market strategist with Credit Suisse in Tokyo .
Senior BOJ officials have separately said financial markets ' views on the economy have been too negative .
" I realise there are negative views in the markets about the impact of the consumption tax hike and drop in public spending , but the markets appear to be exaggerating the magnitude of the negative impact , " a senior BOJ official told Reuters on Friday .
The consumption tax is due to raised in April from three to five percent .