Fri, Oct 03, 2003 - Page 10 News List

Japan may increase limit on its currency purchases

BLOOMBERG

Japan may increase a limit on the amount the government may borrow to pay for currencies it buys to weaken the yen, Ministry of Finance officials familiar with the matter said.

Japan has bought a cumulative net total of ?67.7 trillion (US$609 billion) in foreign currencies, including ?13.5 trillion this year. The borrowing limit on such purchases is now ?79 trillion after being raised by a total of ?10 trillion this year and last.

"Japan is under pressure to consider an expansion of the limit, because the government's yen selling has gained momentum and the current yen-dollar rate is already beyond the level where exporters can make profits," said Shuji Shirota, an economist at Dresdner Kleinwort Wasserstein.

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