Tokyo (AsiaNews/Agencies) – The yen rose to a 15-year high against the US dollar on news that Prime Minister Naoto Kan beat rival Ichiro Ozawa in a vote today for the leadership of the Democratic Party of Japan. For many observers, this outcome is good for the economy. Meanwhile, Asian stocks fluctuated after three days of gains.
The yen climbed to 83.36 per dollar in Tokyo, down from 83.71 in New York yesterday after earlier rising to 83.25, the strongest level since May 1995.
Overall, the MSCI Asia Pacific Index gained 0.3 per cent to 124.15.
Analysts believe the yen’s upward swing is due to Kan’s victory, which lowered the likelihood that the government might sell yen to weaken the currency, a move Ozawa backed.
“Kan has shown a less aggressive stance than Ozawa on currency intervention,” said Kazuya Yashiro, a Tokyo-based foreign-exchange analyst at Himawari Securities Inc. “His victory will therefore give some opportunities to test the upside of the yen.”
At the helm of the government for the past three months only, Kan was able to get his party to back his leadership, giving his administration a vote of confidence.
Nicknamed the ‘son of a salary man’, Kan beat Ozawa, dubbed the ‘shadow shogun’, by a margin of 721 to 491 votes.
Now, his task is to regain the confidence of the hundred or so members of parliament who backed Ozawa.