As G7 leaders set in motion a coordinated intervention designed to halt the rise of the yen, Japan continued its own ultra-loose monetary policy, flooding banks with cash to keep interest rates low. While the yen fell in response, the effect in European time was said to be limited as speculators bought into the selloff.
Reuters reported that all G7 central banks had agreed to the move. Meanwhile, Masaaki Shirakawa, governor of the Bank of Japan (BOJ), repeated his institution’s resolve to keep its loose monetary policy in place, telling reporters after the G7 announcement on Friday, "The Bank of Japan will promote powerful monetary easing and continue providing ample liquidity to ensure market stability."
In early European trading, the dollar rose as high as 82 yen. The markets have been anticipating a flow of yen back to Japan in a repatriation after the earthquake/tsunami/nuclear disaster, but analysts are expecting that Tokyo will continue to protect the yen until the end of Japan’s fiscal year on March 31.