The European Union gave some support on Wednesday to Japan's intervention to weaken the rising yen but said such action would have had more impact if had it been coordinated with others.
"Unilateral actions are not the appropriate way to deal with global imbalances," Eurogroup Chairman Jean-Claude Juncker, on a trip to Switzerland, said when asked about the Bank of Japan's action.
Japan sold yen in the market on Wednesday for the first time in six years and promised more to come in a bid to stop the currency's relentless rise from hurting exporters and threatening a fragile economic recovery.
The yen had surged to its highest against the dollar since 1995, as low U.S. interest rates have made the dollar cheap to borrow and swap for higher-yielding assets and as talk has resurfaced that the Fed might loosen policy further.
Finance Minister Yoshihiko Noda, who will reportedly keep his post after a cabinet reshuffle, indicated Tokyo acted alone on the yen. He said he was in contact with authorities overseas.
But an EU source said Japan had not even informed the Europeans, or the United States, about the intervention.
Euro zone sources said earlier this month that there had been no discussions of European support for a potential intervention by Japan, a clear signal that coordinated help would not have been forthcoming.
The European Commission — the bloc's executive — echoed Juncker's line.
"We are of the opinion that coordinated interventions are to be preferred, as past experience has shown that these are notably more effective than uncoordinated interventions," Commission spokesman Amadeu Altafaj said in Brussels.
But he added that exchange rates out of line with fundamentals could pose problems to stability.
"Excess exchange rate volatility and exchange rates that are not in line with fundamentals may have adverse implications for economic and financial stability," Altafaj said. "Despite Japan's ongoing current account surplus, a too rapid yen appreciation could pose challenges to the recovery."
The Commission said Japan could have equally well used monetary policy instruments rather than a currency intervention.
"Monetary policy measures are at least as likely to have an impact on the yen strength and on deflation as interventions in the currency market," Altafaj said.
The U.S. dollar was boosted further after an official at Japan's Ministry of Finance said intervention was not finished. It climbed about 3 percent on the day to more than 85.50 yen, having dropped to a 15-year low of 82.87 yen earlier.
© 2017 Thomson/Reuters. All rights reserved.