The yen remains overvalued despite its recent steep fall from historic peaks versus the US dollar, Japan's prime minister said on Monday, while the country's finance minister kept up a warning against speculative currency moves.
"Compared to record highs seen last October the yen has weakened but as a trend it is still somewhat overvalued ... The yen is valued highly in relative terms when considering fundamentals," Prime Minister Yoshihiko Noda said in parliament.
Finance Minister Jun Azumi added there was no change in Japan's stance of taking steps against speculative moves in currency markets, though he declined to say whether the yen is correctly valued at present.
"As I've said before, we will take firm action against excessive and speculative moves," Azumi said at the same parliamentary committee meeting. He acknowledged that a strong yen damages the global competitiveness of Japanese firms.
When urged by an opposition lawmaker to step into forex markets more frequently, Azumi said there were no constraints on intervention by Japan, though the fact it regularly discloses intervention amounts makes it different from emerging economies that heavily intervene to weaken their currencies.
The yen in early February advanced towards a record high against the dollar, but it has retreated nearly 10% after monetary easing from the Bank of Japan and brighter prospects for the US economy.
The dollar was down 0.3% at 82.16 yen, hovering below a 10-1/2 month high above 82.60 yen hit on Friday.