The dollar continued to fall against the Japanese yen yesterday despite what appeared to be a hint from the governor of Japan's central bank that the United States and other major nations might intervene to prevent a "crash" of the dollar.
U.S. Treasury officials refused to comment on the statement by Governor Satoshi Sumita during a session of the budget committee in the Japanese parliament. For the first time, Sumita labeled the appreciation of the yen in recent weeks "excessive," according to Japan's Kyodo News Service.
His remarks came after the dollar fell to 180.50 yen at the opening of foreign exchange trading in Tokyo yesterday, which was within a few yen of a low point in 1978 that touched off a dollar-rescue program during the Carter administration. It improved to 182.30 at the close, but was still down from 183.50 the day before, continuing the slide of the past several weeks.
According to Kyodo, Sumita said that preventing a crash of the dollar is a joint responsibility of the United States and its major trading partners, which led some market observers to conclude that Sumita was talking about a joint operation through the Group of Five -- Japan, the United States, France, West Germany and Britain.
The Group of Five had agreed at its Sept. 22 meeting in New York on a concerted intervention, but moving in the other direction -- to bring the dollar down from what was considered an overvalued level.
Kyodo said Sumita declined comment on when or how any intervention might take place to reverse the process started in September. But Sumita added that he is concerned about the effects of the yen's sharp appreciation on the U.S. and Japanese economies.
Japanese manufacturers have complained that the appreciation of the yen -- now up more than 30 percent from its low point early in 1985 -- will cut sharply into their export business once they are forced to raise prices. In the United States, fears have been expressed that the rapid decline of the dollar might help touch off a new burst of inflation as the prices of imported goods rise and domestic producers find room to raise their prices.
Meanwhile, Japanese Finance Minister Noboru Takeshita said at a Tokyo press conference yesterday that he doesn't foresee a crash of the dollar. But a spokesman later cautioned reporters not to interpret Takeshita's remark as a commitment by the Japanese government to intervene in the market.
Market observers said they don't expect that a dollar dip to the 180-yen level necessarily would trigger intervention. "In the United States, the president, administration and Congress are in favor of a lower dollar; the only official expressing concern is Federal Reserve Board Chairman Paul A. Volcker," one dealer told United Press International. He cited comments by a senior White House official pointing out that the dollar is well above its lows against all currencies except the yen.
The dollar was mixed against other major currencies yesterday. In London, the pound rose to $1.4172 from Thursday's close of $1.4145. The Canadian dollar, long weak against the U.S. dollar, also edged up slightly.
European closing rates for the dollar, with late New York prices and comparable Thursday rates in parentheses:
Frankfurt, 2.3590 marks, up from 2.3536 (2.3410 vs. 2.35); Zurich, 1.9485 Swiss francs, down from 1.9535, (1.94 vs. 1.9410); Milan, 1,605.28 lira, up from 1,603.58 (1,592.35 vs. 1,595); Paris, 7.2050 francs, down from 7.2215 (7.1840 vs. 7.2150).