US Dollar Declines Against Yen

Ouch:

TOKYO — A former top Japanese currency official said Thursday the dollar may fall below 100 yen by the summer, and possibly even as low as 95 yen because the interest-rate differential between the U.S. and Japan will greatly diminish in coming months.

Eisuke Sakakibara, a former vice finance minister for international affairs, whose comments often attract interest in financial markets, said Japan is unlikely to intervene to curb the yen’s rises like it did in the past, allowing the currency to strengthen further.

“Japan would need agreement from the U.S. for any intervention, but the U.S. wouldn’t comply,” Mr. Sakakibara said at a seminar in Tokyo. “A U.S. Treasurys document last year clearly states the U.S. is against even verbal intervention.”

The dollar has weakened sharply against the yen in recent weeks amid concerns about the health of the U.S. economy. It fell to 105.92 yen Wednesday, the lowest level since May 2005, as investors became increasingly pessimistic that the subprime-loan crisis may be dragging down the U.S. economy.