Japan's Finance Minister Taro Aso threatened to take "necessary" action against a rising yen dispute against U.S. Treasury Secretary Jacob Lew. Taro was arguing that there was no justification for Tokyo to intervene in the country's currency.
According to Market Watch, the argument between Japan's Finance Minister and U.S. Treasury Secretary over Japan's currency policy underscores growing worries in the U.S. that Japan might resort to downgrading the exchange-rate. This is to revive the world's third-largest economy.
As the Finance Minister spoke after a meeting of the finance officials from the Group of 20 largest economies, Aso stated that countries can get involved with their currencies if there is "excess volatility" or "disorderly" movement in the exchange rates. Those terms are agreed by the G-20 and the smaller Group of Seven industrialized economies that can justify currency interference.
Nasdaq reported that Japan's currency, which is yen, was sharply higher against its rival currencies on Monday. The increase resulted as major oil producers failed to reach a settlement to control the production. This prompted the investors to favor the Japanese currency.
The U.S. dollar's drop off against Japan's yen was largely because of the decline in crude oil prices as lower oil prices weighed on the U.S. energy-sector shares, said Yasuaki Amatatsu, which is the senior analyst at Bank of Tokyo-Mitsubishi UFG. The U.S. currency also came under pressure after the U.S. and the Japanese currency authorities offered opposing views on yen's strength.
The U.S. Treasury Secretary Jack Lew, on the other hand, expressed at a news conference in Washington over the weekend that Japan's currency's recent positive reception had been orderly. He also rejected the Japanese Finance Minister Taro Aso's depiction of yen's movement as "one-sided" and driven by so much speculation, as claimed by ADVFN.
Meanwhile, the ICE U.S. Dollar Index, which is a measure of the dollar against other major currencies, was down 0.1% at 94.2. But the U.S. dollar was up 0.8% against the Canadian dollar to C$1.2925, which jumped to 2.4% against Russia's currency, with a dollar buying of 68.15 rubles.
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