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TEXT OF STORY
STEVE CHITOAKIS: The Bank of Japan took a big step overnight to help Japanese economy. It intentionally weakened that country’s currency — the yen — for the first time in six years. They sold yen and bought dollars. Japan’s business leaders are applauding that move.
The BBC’s Rebecca Singer reports.
REBECCA SINGER: A strong currency may sound like a good thing, but it makes products sold abroad more expensive. Nintendo, for example, gets three quarters of its products outside of Japan. And the strength of the yen can make its gains less attractive to consumers in the U.S. And it’s not alone — well-known manufacturers like Sony, Canon and Toyota are in the same boat.
Now Japan’s finance minister Yoshihiko Noda has decided it’s time to try and weaken the value of the currency by selling Japanese yen and buying U.S. dollars.
YOSHIHIKO NODA: We’ve just intervened in the currency market in order to avoid rapid exchange rate moves. We will take decisive steps if necessary including intervention, while continuing to closely watch currency market moves from now on.
It seems the Japanese prime minister feels more confident to take aggressive measures after fighting off a leadership challenge. The intervention caught traders by surprise, and the impact was immediately obvious. But Japan acted alone without international cooperation from other central banks and that means the effect maybe short-lived.
In London, I’m the BBC’s Rebecca Singer for Marketplace.
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