Japan intervenes to check yen appreciation

Japan did the unexpected on Wednesday stepping into the currency markets for the first time in almost six years to sell the yen and buy dollars. The soaring value of the yen was badly hurting an economy that was showing some signs of revival after the recession of 2008.

The intervention saw the yen fall from a 15-year high against the dollar.  Japan's finance minister Yoshihiko Noda confirmed that the nation had sold the yen.

In Asian trading the yen slid to 85.03 per dollar, from 83.04 earlier in the day, the strongest level it had attained since 1995.

Tokyo Stock Market's Nikkei-225 index soared 2.8% or 256 points to 9,555 in afternoon trading Wednesday, a substantial boost over the 16-month low of 8,824 on 31 August. Then investors were spooked by fears that the export profits would shrink if the yen continued to strengthen.

Market observers said the announcement of the intervention had the desired effect with currency traders shying away from attempting to boost the yen higher.

Finance ministry officials stressed that intervention was not a one-time affair. "Intervention isn't finished after one move," a senior official clarified. "If currency rates change after intervention, there are people who want to sell or buy, so it is a continuous act to respond to these developments."