The yen tumbled the most in more than two years against the dollar as Group of Seven nations said they will jointly intervene in foreign-exchange markets for the first time in more than a decade.
Japan began the effort and the currency fell against all of its 16 major counterparts as Finance Minister Yoshihiko Noda said each country will intervene when their markets open. The G- 7 finance ministers and central bank chiefs said in a joint statement after a conference call that they will “provide any needed cooperation.” The Australian and New Zealand dollars rose, paring weekly losses, as a rally in Japanese shares boosted demand for higher-yielding assets.
The G-7 statement “met everyone’s expectations, it was what people wanted,” said Tsutomu Soma, a bond and currency dealer at Okasan Securities Co. in Tokyo. “The earthquake is considered one of the biggest in a few centuries, and so other nations must help Japan. The yen should fall toward 83 as nations are unified to stop its advance.”
The yen plunged 3.3 percent to 81.57 per dollar as of 11:51 a.m. in Tokyo from 78.89 in New York yesterday, when it touched 76.25, a post-World-War-II high. That’s the biggest drop since Oct. 28, 2008.
The currency dropped to 114.76 per euro from 110.61. The dollar weakened to $1.4066 per euro from $1.4021.
Read the rest of the story: Yen Plunges Most in Two Years After G-7 Agrees to Intervene.