* Japan intervenes in FX markets for first time in six
* Unclear if Japan has stomach for long intervention
* Global worries persist, sentiment at top Asian firms
By Nick Macfie
SINGAPORE, Sept 15 (Reuters) - Japan intervened in foreign
exchange markets for the first time in six years on Wednesday
to stem economic damage from the surging yen, pushing its
currency sharply lower and lifting Tokyo stocks by more than 2
The dollar rose more than 2 percent to 85.18 yen by
midafternoon, rebounding from a fresh 15-year low of 82.87 yen
against the Japanese currency hit in early trade.
The euro sterling and the Australian dollar also rose
against the yen, though traders doubted Japan had bought
anything but dollars for yen.
Leading European shares opened slightly lower, pausing
after an almost uninterrupted winning streak since early
September as traders awaited more economic data from the euro
zone and the United States.
In Japan, Finance Minister Yoshihiko Noda confirmed the
country had intervened in currency markets for the first time
since 2004, saying Tokyo was communicating with authorities
overseas but indicating that it had acted alone.
Market sources said it continued to intervene through the
morning, selling the yen to stem a rise that was threatening
the country's fragile economic recovery.
The Nikkei reversed early losses and surged 2.3 percent on
word of the intervention. Shares of exporters, which have been
dogged by the yen's strong gains this year, were among the
biggest winners, with Sony Corp rising 4 percent.
The MSCI index of Asia Pacific stocks outside Japan rose
0.3 percent, focusing more on questions surrounding the global
economic recovery and held in check by a lacklustre performance
on Wall Street overnight.
Investors will be looking to U.S. industrial production
data later in the day after promising retail sales reports on
Tuesday added to optimism that the U.S. recovery, while slow,
is not stalling.
Growing concerns about the health of the U.S. economy in
recent months have dented business confidence, with a Reuters
survey showing sentiment at Asia's top companies fell in the
third quarter, the first decline in six quarters.
"The increased concern about a double-dip in the West,
mainly the United States, coupled with concern about how far
Chinese policy makers will go with tightening measures are
weighing on sentiment," said Kirby Daley, a senior strategist
at Hong Kong brokerage Newedge Group.
Unlike the rest of Asia, which has rebounded quickly from
the global financial crisis, Japan's recovery has been far more
precarious. Exports, the lone bright spot in the economy, have
been jeopardised by the yen's jump of more than 11 percent
against the dollar so far this year through Sept 14.
Prime Minister Naoto Kan's government has been trying to talk
down the yen in recent weeks but had stopped short of
intervening in the markets, apparently worried that acting
without Group of Seven partners would not be very effective.
Kan was re-elected ruling party leader on Tuesday,
decisively fending off a challenge from powerbroker Ichiro
Ozawa, an outspoken advocate of intervention.
But it was unclear whether Kan's government had the stomach
for a prolonged and expensive campaign similar to Japan's last
foray into foreign exchange markets in 2003-2004.
"The intervention can buy time, but the government simply
can't intervene heavily for a long time as its effect will run
out quickly," said Masaru Hamasaki, senior strategist with
Toyota Asset Management in Tokyo.
Simon Flint, Nomura Securities' global head of foreign
exchange research based in Singapore, said Japan will be seen
as a special case by other world powers.
"Obviously, its economy has been in significant trouble for
a while, stocks have been depressed for some time, export
performance relative to the Asian peer group has been very
weak. To some degree there will be some sympathy in the rest of
the world for Japan's predicament."
Other markets were broadly lower on Wednesday.
Spot gold a traditional safe port of call amid volatile
currency and stock markets, edged down after having surged more
than 2 percent to a record $1,274.75 an ounce in the previous
Oil prices also fell after Enbridge Inc said repairs to a
key pipeline taking Canadian crude to the United States were
nearly complete and it hoped to gain approval to resume
U.S. crude for October delivery was down 44 cents, or 0.57
percent, at $76.36 per barrel.
(Additional reporting by Charlotte Cooper in Tokyo)
(Editing by Kim Coghill)