Tokyo - UPI
The Japanese government, seeking to check its yen appreciation, Wednesday announced a $100 billion provision to help businesses make overseas deals. Under the program which would last a year, Japanese companies would be encouraged to exchange their substantial yen funds for foreign currencies for mergers and acquisitions, which in effect would bring down the yen\'s value against currencies like the U.S. dollar. The move is different from direct intervention in the currency markets. Such a step was taken earlier this month by the Japanese government and its central bank, but the yen has continued to rise against the greenback, trading at record high levels. A stronger yen makes Japanese exports more expensive for importing countries. The announcement was made by Finance Minister Yoshihiko Noda, who said it would prompt overseas activities by Japanese companies, Kyodo News reported. In other measures announced by Noda, foreign exchange market dealers would be required to report their trading positions. In addition to the latest moves, the government has kept open its option of again intervening in the currency markets, buying up dollars and selling the yen to weaken the latter. The Wall Street Journal reported traders, however, are beginning to feel the government will not be able to significantly make an impact on exchange rates. Economists told the Journal they think the most effective way to bring down the value of the yen would be for the central bank to ease in monetary policy and pump more liquidity into markets. Copyright 2011 United Press International, Inc. (UPI). Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI\'s prior written consent.