11:21 PM
TOKYO |
TOKYO (Reuters) - The Group of Seven advanced nations will hold talks later on Thursday to discuss the impact of Japan's deepening nuclear crisis, Japanese officials said, while dismissing the need for joint intervention in currency markets.
Group of Seven sources told Reuters earlier the call was about steps to calm financial markets roiled by the nuclear crisis.
Economics Minister Kaoru Yosano, however, insisted the yen and Japanese stock markets were not in a state of turmoil and that the government would like the G7 to merely provide a psychological prop to markets, rather than intervene.
The yen spiked to a record high against the dollar, while shares in Japan and elsewhere in Asia fell on Thursday after U.S. officials said the risk of a catastrophic radiation leak from an earthquake-crippled Japanese nuclear plant was rising.
The Japanese currency bolted higher amid speculation Japanese insurers would have to repatriate funds to pay for massive claims following Friday's 9.0 magnitude quake and the devastating tsunami that ravaged Japan's northeast.
The disaster and subsequent nuclear crisis have wiped hundreds of billions of dollars off global stock markets.
But Japan's Finance Minister Yoshihiko Noda, Yosano and other officials dismissed such talk about repatriation and said speculation, not fund flows, was responsible for the currency's surge, which threatens to add further pressure on the quake-hit economy.
"I don't think stock and currency markets are in a state of turmoil," Yosano said, when asked whether the G7 advanced nations should jointly intervene in the currency market to stem yen rises.
"We would like to get psychological support from the G7," he told Reuters in an interview on Thursday.
Noda confirmed the G7 was holding a teleconference at 6 p.m. ET on Thursday and said Japan would explain to the group the damages from the quake and the situation in financial markets.
He declined to comment on a possibility of currency market intervention to weaken the yen, but markets interpret reminders about monitoring currency moves as a warning that the authorities could step in if they thought the yen was moving too rapidly.
"Market moves have been nervous amid speculation while trade has been thin," Noda told reporters. "I will be closely watching market moves today.
While government officials were stepping up their verbal intervention, the Bank of Japan continued to pump massive amounts of cash into the money market to make sure it would not seize up, with the latest offer of 5 trillion yen in same-day funds. It had offered a record 22 trillion on Monday, through a combination of same-day and longer tenor funds.
G7 SUPPORT
Other Group of Seven sources told Reuters that G7 finance officials would discuss what to do to calm global financial markets.
Posts
