Reuters: US Dollar Report: UPDATE 1-Japan's Azumi: ready to respond to FX moves as needed

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UPDATE 1-Japan's Azumi: ready to respond to FX moves as needed May 7th 2012, 06:54 Mon May 7, 2012 2:54am EDT * Yen gains after European voters reject fiscal austerity * Strong yen threatens Japan's export-focused economy * Japan has intervened before but impact short-lived By Stanley White TOKYO, May 7 (Reuters) - Japanese Finance Minister Jun Azumi said on Monday he is prepared to respond to currency moves as needed when asked about the yen's rise after two serious blows to Europe's fiscal austerity drive drew safe-have flows into the yen. The dollar traded near a two-month low versus the yen , while the euro sank to a three-month low versus the dollar due to mounting worries that Europe's sovereign debt crisis may intensify following elections in France and Greece. The debt crisis, which has been simmering for more than two years, has strained Japanese policymakers' nerves because it tends to push up the yen and hurt external demand, which weighs on Japan's export-focused economy. "Stocks are falling and the yen is rising in part due to political uncertainty in Europe," Azumi told reporters. "We are ready to respond as needed on currencies. We need to monitor whether moves are due to speculation or whether they reflect economic fundamentals." Two political parties in Greece that support fiscal spending cuts failed to secure a majority in parliament in a serious blow to the European Union's push for fiscal discipline. Voters in France also swept incumbent President Nicolas Sarkozy from office in favour of Socialist Francois Hollande, who has called for more policies to stimulate economic growth in Europe. Japan spent a record 8 trillion yen ($100.2 billion)in unilateral intervention in the currency market last Oct. 31, when the dollar hit a record low of 75.31 yen, and another 1 trillion yen in early November on undeclared forays into the market. Authorities have stayed out of the market since then but are quick to express their discomfort when the yen starts rising. Link this Share this Digg this Email Reprints

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