Japan continued to warn investors that it would maintain tight control on the yen’s value, adding that another joint intervention by Tokyo together with other G7 nations would not be out of the question if it became necessary. It also floated the possibility of three budgets to cope with the triple disaster of earthquake, tsunami and nuclear emergency.
Reuters reported that Finance Minister Yoshihiko Noda said at a news conference that followed a Cabinet meeting, "We will cooperate as appropriate while closely watching market movements." While the yen was trading off Thursday’s highs in the wake of the first G7 intervention since 2000, Noda said that he would not comment on specific levels when questioned about market reaction to the intervention.
Tuesday saw levels for the currency coming in just below 81 to the dollar; on Thursday it had hit a record high of 76.25, despite repeated interventions by the central bank. The selling of yen by the G7 on Friday helped to rein in the yen’s heady ascent, thought to be fueled by speculators anticipating a repatriation of the currency for the massive rebuilding project necessary after the disaster.
The budget was also a subject of concern as Koichiro Gemba, Japan’s national policy minister, was cited by Kyodo news agency as saying that, beginning in April, the country might need three budgets to cope with the huge job of rebuilding.
The opposition had been blocking a number of bills in Japan’s parliament that were necessary to the 2011/2012 budget in an effort to force an election. In the wake of the disaster, however, the opposition declared a truce so as not to get in the way of relief and reconstruction.
The task before the nation is so enormous that Naoto Kan, the country’s prime minister, invited the main opposition party’s leader to join the cabinet as his deputy in charge of relief, but the offer was refused. However, on Tuesday Kaoru Yosano, the economics minister, appealed to the opposition for a “grand coalition” to better tackle the country’s crisis, and was reported to say that he believed the refusal was not a final decision.
While Kan refused to put a total on the budgets, saying it was too early, Yosano had said last week that the total might exceed 20 trillion yen ($247 billion). That puts it far above the reconstruction figures for the Kobe quake in 1995.