Yen strengthens in Asian trade

The yen strengthened slightly in Asian trading on Tuesday after a US Treasury official praised Japan's recent moves to boost the economy as Tokyo faces claims it is manipulating the currency's slide, AFP reports. Lael Brainard, who will lead the US delegation to Friday's meeting of the Group of 20 economic powers in Moscow, called on members to "move to market-determined exchange rates and refrain from competitive devaluation". Brainard reiterated a US call for China -- a frequent target of currency manipulation criticism -- to do more to let the yuan float more freely in the market. She also welcomed Japan's efforts to boost growth and counter deflation -- which have sent the yen tumbling -- suggesting Washington would not support any criticism of Tokyo at the G20 meeting. The comments also come as some European officials have warned that the euro was overvalued -- threatening the bloc's exports and economic recovery -- and hinted at market intervention to stem the unit's rise. In Tokyo the dollar bought 94.21 yen, from 94.33 yen late Monday in New York, where it surged from its 92.70 yen close Friday. The euro fetched 126.26 yen on Tuesday, from 126.42 yen in New York, while it also bought $1.3402, compared with $1.3404. Tokyo on Tuesday again rejected claims it was trying to force down the value of the yen, saying the new conservative government's big spending and pressure on the central bank for aggressive easing was designed to stoke growth. "There is no change in Japan's position," Finance Minister Taro Aso told reporters. "Japan's new government is carrying out monetary policy and economic policy appropriately in order to pull out of a long-running, deflation-induced downturn. There is nothing more to say." Japan's finance ministry on Tuesday declined to comment on a report that the Group of Seven leading economies was mulling a joint statement about the dangers of a currency war. Citibank Japan chief currency strategist Osamu Takashima said the yen's downward trend was likely to continue. "We expect the (dollar/yen) pair's upside to test the 95 yen level," he said in a note, according to Dow Jones Newswires. Forex markets were also awaiting a two-day Bank of Japan policy meeting this week. The central bank is expected to hold steady on any new policy moves as Governor Masaaki Shirakawa prepares to step down about three weeks before the end of his five-year term. "The (BoJ's) Board will probably be happy to sit on the sidelines until the new leadership team is in place," London-based Capital Economics said.