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G7 fires warning shot on Japanese currency

(Agencies)
Updated: 2008-10-27 14:14

Mizuho Financial Group, Japan's second-largest bank, and third-ranked Sumitomo Mitsui Financial Group, are both looking to raise as much as 500 billion yen ($5.4 billion), newspapers reported on Monday.

And Japanese exporters, already facing their toughest markets in decades, fear a surging yen may pummel demand for their products. The yen climbed back near a 13-year peak against the dollar on Monday, with Japanese investors continuing to bail out of overseas currencies and bring the money home.

Japan has not intervened in currency markets since 2004.

Australia's central bank stepped into the foreign exchange market to support its plummeting currency on Friday, the Reserve Bank of Australia said on Monday, The Aussie slid to five-year lows against the US dollar and its deepest-ever trough against the yen.

The last time the RBA moved to shore up the currency was in August 2007, when the melt-down in US subprime mortgages first exploded into a global credit crisis. The Australian dollar was up more than 1 percent to $0.6240, but has dropped 29 percent so far this year.

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