The euro surged versus the yen on Wednesday, as Japanese officials finally intervened to stop the rapid rise of their currency.
Japan has been reluctant to buy up dollars and de-value to yen, but its strength threatens to devastate Japan’s already sluggish export-driven economy.
Finance Minister Yoshihiko Noda confirmed today’s intervention at a news conference in Tokyo, but did not provide details.
The euro jumped more than 3 percent to a monthly high of Y111.50, having touched a nine-year low of Y105.41 back in August.
The euro was also buoyant against the dollar, inching near yesterday’s monthly high of $1.3033 despite news that euro zone’s annual inflation rate dipped in August.
With price stability maintained, the European Central Bank has plenty of room to keep their key interest rate unchanged at a record low of one percent.
Consumer prices in the 16 Eurozone countries were up 1.6% after creeping slightly higher in recent months, Eurostat said, matching the preliminary estimate and in line with expectations.
The euro eased fractionally versus the sterling, slipping to 0.8325 from a month and a half high of 0.8399.
In economic news from the US, an indicator of manufacturing activity in New York fell in September to its lowest level since July 2009.
The New York Federal Reserve said its general business conditions index fell to 4.1 in September from 7.1 in August,
And while a report released by the Federal Reserve on Wednesday showed that a jump in mining output contributed to a modest increase in industrial production in August, the pace of growth was limited by a notable decrease in the output of utilities.