Japan intervenes in currency market to weaken yen

Japan on Monday intervened in currency markets for the first time since August to weaken the yen, the government said, after the unit hit a fresh post-war high against the greenback. Finance Minister Jun Azumi told reporters that Japan\'s action was unilateral and did not comment on the size of the intervention. Japan\'s Nikkei index rose by more than 0.50 percent in the wake of the move. The dollar rocketed to 79.20 yen at around 0245 GMT after hitting a fresh post-war low of 75.32 yen in Oceanian trade earlier Monday. The move also saw the euro rise sharply higher to 111.25 yen from 107.06 yen earlier Monday. Initial gains were quickly weighed by profit taking and as Japanese exporters looked to repatriate overseas earnings at Monday\'s quickly improved rates ahead of monthly book closing, said dealers. \"Although I had repeatedly said we will take decisive measures against speculative moves in markets, those moves unfortunately continued so I ordered intervention at 10:25 (0125 GMT),\" Azumi told reporters at a quickly convened news conference. \"It was solo intervention this time,\" Azumi added. The yen has renewed post-war highs against the dollar and has surged versus the euro as investors seek the safe-haven currency as a refuge from volatile markets stirred by eurozone debt fears and concerns for the global economy. Japanese officials have in recent weeks stepped up intervention rhetoric in an attempt to verbally weaken the unit, but it continued to strengthen regardless. Officials had hoped that last week\'s EU agreement on measures to shore up the eurozone and help resolve the bloc\'s debt crisis would boost confidence and have an easing effect on fund flows into the Japanese unit. Concerns are growing in Japan that the strong currency, which erodes the repatriated profits of exporters and makes exports less competitive, could undermine a fragile recovery from the March 11 earthquake and tsunami. Japan\'s manufacturers have staged a rebound since the March disasters that left around 20,000 dead or missing and shattered crucial supply chains, heavily disrupting Japanese industry. But fears have mounted that such efforts are being compromised by the strength of the Japanese currency, with every one yen rise wiping tens of billions of yen from the annual operating profit of giants such as Toyota. With more companies considering shifting jobs and production overseas in an effort to make their goods more competitive, officials have warned of a \"hollowing out\" of Japanese industry. The Bank of Japan on Thursday announced further easing measures to help safeguard the economic recovery from the impact of a record-high yen and the fallout from the eurozone crisis. Monday\'s intervention is Japan\'s first since the government spent 4.5 trillion yen ($59 billion at current rates) in August to stem the rise of the currency. It is the fourth intervention since September 2010. \"It would not be a surprise if the amount of funds used for this intervention surpass previous moves,\" said Teppei Ino, analyst at the Bank of Tokyo-Mitsubishi UFJ. He added that the latest round of intervention was likely not yet complete. \"There will be many market participants who will want to sell dollars at the current levels, but the unit has not fallen much against the yen indicating that the market is still alert over further action.\"