WASHINGTON, March 24 (Reuters) - There is no sign that Japanese insurers are selling foreign assets to pay rebuilding claims, and even if they do, it will not materially affect the yen’s value, the International Monetary Fund said on Thursday.
The IMF also said the Japanese yen was broadly in line with long-term fundamentals despite the currency’s recent rise.
“We have seen no actual evidence of repatriation flows,” said Mahmood Pradhan the IMF’s Japan mission chief. “We do not think that repatriation flows will be large enough to make a material difference in the value of the yen over time.”
A sharp rise in the Japanese yen since the earthquake has raised questions about whether Japanese businesses were selling foreign assets or foreign insurers were seeking to raise yen to meet obligations from the powerful March 11 earthquake and tsunami.
Pradhan said it was difficult to tell whether speculation was behind the strengthening yen. He also said the Group of Seven’s intervention to cap the currency’s rise was appropriate since the exchange rate movements were “disorderly and unhelpful.”
The IMF’s assessment of Japan’s economic damage was similar to what many private economists have concluded. The economy will remain weak until power supplies are fully restored, and then it should strengthen as the country rebuilds. (Reporting by Emily Kaiser)