Our World Correspondents

Washington
Lee Siew Hua

Japanese crisis is almost over, says Mr Yen

DAVOS -- The Japanese economy is approaching the end of its crisis and is expected to bottom out in the middle of this year, Japanese Vice-Minister of Finance for International Affairs Eisuke Sakakibara said here yesterday. "There are some indications that October-December GNP figures for last year may be zero or slightly positive, but I don't know whether that will be continued into the January-March period," he said.

"It takes time for confidence to be restored.

"It will take some time for the real economy to bounce back."

He also said that at the yen's present rate of 115-116 to the United States dollar, "many Japanese exporters are quite competitive", but an "excessively" strong yen is not acceptable and "when we see excessive strength, we do intervene".

The yen's rate of 130-140 to the dollar late last year was the result of extremely short positions taken by investors, such as hedge funds, at the height of concern over the Japanese economy, he said.

But "the financial crisis is about to be over and the rate has returned to its pre-crisis level", he added.

He said that a "yen block" for Asia, in which regional currencies would look to the yen, was "unrealistic".

Asia is a dollar-denominated area and it would continue to be for some time.

"We are internationalising the yen, but it will probably take up to 10 years for the yen to become a fully internationalised currency," he said.AFP

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