The US dollar fell to a new 15-year low against the yen in
early Tokyo trade Tuesday as investors tried to avoid risky bets, while adding
pain for Japanese exporters.
The dollar fell below 83.30 yen at midmorning in Tokyo,
breaking the previous low of 83.35 yen it fetched on Sept. 8.
New global banking regulations and signs that growth in
China is picking up - assuaging fears of a steep slowdown in the world's No. 2
economy - weighed on the dollar Monday.
"The dollar was sold as investors tried to avoid
risk," said Yuji Kameoka, chief currency strategist at Daiwa Institute of
Research in Tokyo.
He said market speculation that Prime Minister Naoto Kan
would win the ruling party leadership election later Tuesday might also have
contributed to the stronger yen.
"Although there are mixed views, Prime Minister Kan is
seen as being more reluctant to intervene in the currency market," Kameoka
said.
The strong yen hurts Japan's exporters by eroding their
foreign-earned income when it is repatriated to Japan.
Finance Minister Yoshihiko Noda indicated government
intervention may be necessary if the yen rises further.
"We will take a decisive action, including
intervention, when needed," Noda said. "We will keep watching the
currency market movement with grave concerns and closest attention."
The euro also gained to $1.2872 from $1.2867 late Monday.
The dollar fell to a post-World War II low of 79.75 yen in
1995.
Kan faces off against a powerful political veteran in the
party vote that could give the country its third premier in a year.
Old-school power-broker Ichiro Ozawa is seeking to oust Kan
as head of the Democratic Party. Because of the party's majority in the lower
house of parliament, its leader automatically becomes prime minister.
Media reports said the outcome was too close to predict.
Japan's Nikkei 225 stock average fell 0.23 percent to 9,300.65
points at the end of morning trade in Tokyo as the yen's strength dampened
market sentiment, hitting automakers, techs and other exporter issues.
