Reply #54: IMF's Lipsky says BOJ rate rise reflects better econ [View All]

[54anickel]

http://www.signonsandiego.com/news/business/20070222-0614-imf-lipsky-yen.html

BRUSSELS – The Bank of Japan's interest rate increase on Wednesday reflects better economic fundamentals in the Japanese economy, a top IMF official said, but he declined to comment on the subsequent fall in the yen.

Euro zone countries have complained about the weak yen, which is trading near all-time lows against the euro, because it gives Japanese exporters an advantage over European rivals on world markets.

“The yen rate at this point is a market-determined rate, the authorities are not intervening,” the International Monetary Fund's first deputy managing director John Lipsky told Reuters in an interview on Thursday.

The weakness of the yen stems largely from low Japanese interest rates, which make investment in higher-yielding markets more attractive.

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“What determines exchange rates in the short run is always a complex matter, and I think it's not very productive to try to judge daily variations in the exchange rate relative to longer-term trends,” he said.

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