(Reuters) - European authorities would not welcome intervention by Japan to curb the appreciation of the yen, and joint intervention by major central banks is not on the cards, a euro zone official said on Wednesday. The official, who asked not to be named, said that considering that Japan is likely to benefit more than other countries from the pickup in Asian demand, the yen’s appreciation should not in itself be considered negatively for the world economy, though it has happened too fast.
“Forex intervention by Japanese authorities would not be welcome in Europe,” said the official.
“I doubt any sort of coordinated intervention will ever fly,” he added.
The official is familiar with euro zone official thinking on the issue, but is not a central banker and not among those who would decide directly on any intervention.
The yen hit 15-year highs versus the dollar on Wednesday, and speculation is rising that Japan could intervene on currency markets to stem the rise.
Japan’s authorities haven’t intervened since March 2004, when they ended a 15-month-long yen selling spree.
“Yen appreciation over the last month and a half versus the dollar has been too rapid,” the official said.
“Although partly a reflection of changes in growth outlook in the U.S. and the normalisation of the debt situation in Europe, it could threaten ongoing recovery in Europe.”
Whether this appreciation is excessive is a matter for the Japanese authorities to judge, and if necessary intervene, the official said.
Nonetheless, “European policymakers wouldn’t do anything about it and would not welcome any move by others.”
European officials may fear that intervention to curb yen strength could lead to a rise in the euro which would penalise euro zone exports.
The European Central Bank often warns about the risks of currency volatility but has not intervened on markets since 2000, when it acted to stem euro depreciation.
It takes the view that foreign exchange intervention, when necessary, is most effective when conducted jointly with other central banks.