The yen will rise beyond its postwar high of 79.75 versus the dollar and stay stronger than 80 this year because of the structural weakness of the U.S. economy, according to Eisuke Sakakibara, who at one time was Japan's top currency official.
"The U.S. still faces a balance-sheet problem, with businesses saddled with bad loans and households with excess debts, so the sustainability of recovery is still doubtful," Sakakibara said Monday evening at an event hosted by the Tokyo Foreign Exchange Market Committee and the Forex Club Japan. "The dollar's downward trend will continue over the medium to long term."
Sakakibara, 69, said Finance Minister Yoshihiko Noda should declare that a strong currency is in Japan's interest. Sakakibara became known as "Mr. Yen" during his 1997-1999 stint at the Finance Ministry for his efforts to influence the yen rate through verbal and actual intervention in the currency markets.
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