TOKYO, Oct 8, (Agencies): Japan said it will continue to intervene to curb a strong yen if necessary, just hours before G7 and IMF officials meet to discuss escalating tension over currency policies, and Thailand is also poised to act.
China, which has rebuffed calls from the West to let its currency rise faster, allowed the yuan to firm on Friday to its highest against the dollar since a revaluation in July 2005.
Traders said Beijing may be making some concessions ahead of International Monetary Fund and World Bank meetings this weekend. But they said any further rise would be limited so as not to harm its exports.
With positions entrenched, expectations for any meaningful agreement in Washington are low although fears of a global currency war have jumped to the top of the agenda.
“We are approaching a G7 meeting, but regardless of this, Japan will take firm measures, including intervention, when needed,” Japanese Finance Minister Yoshihiko Noda told reporters when asked about the yen’s rise to another 15-year high on Thursday. “This is Japan’s basic stance.”
Japan, worried a strong yen would hit its vital export sector, intervened in the market for the first time in six years last month, drawing criticism from its peers.
Prime Minister Naoto Kan sounded a little more conciliatory, saying Tokyo wanted to cooperate with its Group of Seven peers on currencies, but in the same breath reiterated the message that the authorities would take “decisive steps” if needed. G7 leaders hold a closed-doors dinner on Friday.
Global policymakers have been clashing over the dollar’s broad-based decline, with emerging economies stepping up efforts to cap their currencies, actions which developed nations argue could derail economic recovery.

Thailand’s finance minister will propose measures to handle the baht’s strength at a cabinet meeting next week, Prime Minister Abhisit Vejjajiva said on Friday.
The baht, which has risen about 11 percent against the dollar this year, the second-best performer in Asia after the yen, slipped after the comments.
Chinese premier Wen Jiabao, in Europe this week, politely rejected calls to let the yuan appreciate faster and Brazil on Monday doubled a tax on foreign investors buying local bonds, trying to curb a currency rally.
Yi Gang, a deputy governor of the People’s Bank of China (PBOC), was quoted as saying on Friday that while China would continue to reform its exchange rate regime a sharp rise in the yuan would harm its economy.
Despite low expectations for the weekend talks in Washington, moves are afoot to create a more effective forum to tackle currency issues.
France will start talks on overhauling the global monetary system during its forthcoming G20 presidency to improve policy coordination and stem capital flows distorting exchange rates, Economy Minister Christine Lagarde said.
“If you look ... at the latest moves that are taking place, whether from Brazil or from Japan for instance, let alone from China, you really wonder what kind of coordination there is,” she said.

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SYDNEY: The Australian dollar fell back to end at 98.19 US cents in Sydney on Friday after hitting a record high 99.18 the previous day, stalling its expected march to parity with the greenback.
“It was a typical recoil from a key level. We can put the parity party campaign on ice, at least for the time being,” said 4Cast financial markets head of research Ray Attrill.
On Thursday, the Australian dollar burst through 98.49 US cents for the first time since the currency was floated in 1983.
The breakthrough came on the back of a surge in new jobs, which raised expectations the central bank will lift interest rates from 4.50 percent to curb inflation in the mining-driven economy.
Analysts said the Aussie lost one US cent from the record high on profit taking and a firmer US dollar, trading between 97.92 US cents and 98.47 US cents on Friday.
“The Australian dollar is pretty stable really, down from its peak overnight awaiting US payrolls tonight,” Royal Bank of Scotland FX strategist Greg Gibbs told Australian news agency AAP.
However, the Aussie is still expected to reach parity with the greenback by the end of the year.
“That looks extremely likely over the next two months or so; conservative in fact,” Westpac chief economist Bill Evan said.