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UPDATE 1-Honda CEO: govt should intervene to stem fx swings
November 6, 2008 / 4:00 AM / 9 years ago

UPDATE 1-Honda CEO: govt should intervene to stem fx swings

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TOKYO, Nov 6 (Reuters) - Honda Motor Co (7267.T) Chief Executive Takeo Fukui said on Thursday Japanese authorities should intervene in the currency market to prevent wild fluctuations in the yen. “We can’t do business when foreign exchange rates are swinging like this,” Fukui told reporters at the launch of the remodelled Life minivehicle in Tokyo.

“Of course (the government) should intervene,” Fukui said, adding that concerted intervention was also an option.

The dollar fell to a 13-year low near 90.90 yen JPY= in late October, as worries of a global recession triggered the unwinding of carry trades, which use low-yielding currencies to buy higher-yielding currencies and assets.

The dollar stood at around 97.80 yen on Thursday.

The stronger yen, which erodes the value of earnings made overseas, has prompted most Japanese automakers to lower their profit forecasts for the business year ending in March.

Honda, Japan’s No.2 automaker, cut its annual operating profit forecast to 550 billion yen from 630 billion yen for this year, but that is based on average dollar and euro rates of 100 yen and 135 yen for the second half -- more favourable than current levels. [ID:nT120116] (Reporting by Chang-Ran Kim; editing by Sophie Hardach)

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