Japan’s Nikkei share average rose more than 2 percent in early afternoon trade on Tuesday after Japan’s finance minister said the government will intervene if the yen’s “one-sided” rise persists.
Finance Minister Taro Aso on Tuesday reiterated his resolve to intervene in the currency market if the yen’s gains last long enough to hurt Japan’s fragile economic recovery.
The Nikkei gained 2.2 percent to 16,564.62 in early afternoon trade.
“He said it again, so there is a growing view that he will actually do it,” said Chihiro Ohta, general manager of investment research and investor services at SMBC Nikko Securities.
Ohta added that the extended strong-yen trend hadn’t changed, but investors were buying the dollar as if they believed intervention, and a weaker yen, could be imminent.
The dollar rose roughly 0.4 percent to a 12-day high of 108.795 yen, after surging more than 1 percent on Monday. The U.S. currency had tumbled to an 18-month low of 105.55 yen last week after the Bank of Japan stood pat on monetary policy.
The broader Topix gained 2.2 percent to 1,335.06 and the JPX-Nikkei Index 400 added 2.2 percent to 12,072.01.