Japan steps in to curb yen strength

Japan has intervened to weaken the yen for the second time in three months after the currency hit a fresh record high against the dollar.

Japanese finance minister Jun Azumi said Tokyo stepped in to counter speculative moves that were hurting the economy, Reuters reports.

The yen slumped 3.9% to 78.81 per dollar this morning after climbing to a record 75.35 earlier today. The ‘safe haven’ currency had strengthened even as global stocks rallied in response to EU leaders’ action on the eurozone debt crisis.

Azumi said the government will continue to intervene until it is satisfied with the results.

Tokyo's latest foray into currency markets follows repeated warnings it is unhappy with the strength of the yen, and comes just days before the Group of 20 leaders' summit in Cannes.

Japanese policymakers say a strong yen is an extra burden it cannot handle on top of its fragile economy, mounting public debt, and $250bn rebuilding project following the earthquake in March.

"I have repeatedly said we would take decisive steps against speculative moves in the market," Azumi told a news conference. "Unfortunately the market has not reflected our economic fundamentals at all."

Several G20 nations, including South Korea and Indonesia, have been intervening regularly in currency markets, but Japan is under more scrutiny as an issuer of one of three global currencues and does not want to be deemed a currency manipulator, Reuters reports.

China has been at loggerheads with the US over accusations it is manipulating the renminbi to give itself more advantageous trading conditions, while harming US interests.