Japan moves to combat rising yen

The central bank stepped in to sell yen and buy dollars, a day after the yen hit a 15-year high against the dollar.

It is the first time in six years that the Bank of Japan has intervened, and further action has not been ruled out.

A strong yen makes Japanese exports more expensive, and reduces profits when earnings are repatriated.

In early trading on Wednesday, the dollar rose to 85 yen, after hitting 83.09 yen on Tuesday.

Investors welcomed the intervention, sending Japan's Nikkei share index up by 2.9% at first, with the index eventually closing 2.34% higher at 9,516.56.

The yen had spiked after news filtered through that Prime Minister Naoto Kan had survived a leadership challenge from rival Ichiro Ozawa.

Traders had reckoned Mr Kan would be less likely than Mr Ozawa to take measures to weaken the yen; Kazinform cites BBC.

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