For Yoshihiko Noda, Japan’s finance minister, the G20’s weekend warning against disorderly exchange rate movements suggested the yen might enjoy a "more stable" relationship with the dollar and euro.
That looks unlikely — at least if your definition of stable means an end to the Japanese currency’s climb against the greenback, an ascent only briefly interrupted last month by Tokyo’s massive yen-selling market intervention.
Last week’s gathering of G20 finance ministers and central bankers in South Korea may even have accelerated the shift, as market participants think the vaguely worded communiqué will make further currency interventions by Japan more difficult. On Monday the dollar fell more than 1 per cent against the yen to a new 15-year low of Y80.41. The US currency is now within sight of its Y79.70 postwar low.
So if the G20 consensus cobbled together in Seoul has not tamed the markets, what can Tokyo do now?
There is no doubting the concern in policymaking and business circles about the implications of a stronger currency for Japan’s faltering recovery.
Read the rest of the story: Japan looks to life with strong yen.