Yen remains steady

TOKYO - THE yen was steady in Asia on Friday after Japan's new finance minister said markets should determine exchange rates, while hinting at possible intervention if the currency shoots higher again.

'Basically, the market determines foreign exchange rates', Mr Naoto Kan said at a news conference. As finance minister, however, it was his duty 'to take action on foreign exchange when necessary', he added.

Mr Kan's remarks came a day after he rattled markets with a call for a weaker yen, prompting a thinly veiled rebuke from Prime Minister Yukio Hatoyama, who warned him not to publicly comment on currency levels. 'The government basically should not discuss foreign exchange,' PM Hatoyama told reporters. 'Regarding foreign exchange, stability is desirable.'

The dollar stood at 93.28 yen in Tokyo early afternoon trade, against 93.25 in New York late on Thursday, when the Japanese currency had fallen sharply. The euro was little changed at US$1.4316 after 1.4318 and at 133.48 against 133.50.

Mr Kan's comment on Thursday that he wanted to see the yen weaken further was widely seen as a signal that Tokyo was toughening its stance against the currency's strength, which is bad for exporters.

'The market confirmed the new finance minister's stance of favouring a weaker yen, so the dollar is staying higher,' said Mr Hideaki Inoue, chief foreign exchange manager at Mitsubishi UFJ Trust and Banking.