Ministry later says Aso misspoke after calling yen’s fall unexpected By William L. Watts and V. Phani Kumar, MarketWatch FRANKFURT (MarketWatch) — The yen rebounded sharply versus the dollar and euro Friday after Japan’s finance minister said the currency’s fall had caught the government by surprise — a remark the ministry later described as a misstatement. The dollar USDJPY -1.41% erased an early gain to trade at 92.47 yen in recent action, down from ¥93.41 in North American trade late Thursday. The euro EURJPY -1.51% fetched ¥124.01, down from around ¥125.32. During a parliamentary session, Taro Aso said the dollar had “abruptly risen to the ¥90 level from the previous ¥78-¥79 level in a manner we didn’t anticipate.� Later, a finance ministry official said Aso had meant to say the yen’s drop had been “fast paced� rather than unexpected. See: Japan: Aso meant to say yen's fall 'fast-paced' . Combined with indications Japanese exporters are starting to re-emerge as yen sellers, Aso’s comments were “sufficient to drive a stop run down to a low of ¥92.17 before a partial retracement,� said Adam Cole, currency strategist at RBC Capital in London. Aso’s remarks certainly don’t imply the yen’s fall is unwelcome, “but does call into question the ¥95-100 range [versus the dollar] that many were beginning to talk of� as a government objective, Cole said. The euro, meanwhile, stabilized against the dollar, after taking a tumble the previous day, after European Central Bank President Mario Draghi said policy makers would watch the currency’s appreciation for any sign it is affecting the euro-zone inflation outlook. Draghi also emphasized repeatedly that the ECB was maintaining an “accommodative� monetary policy. While strategists said Draghi’s currency remarks weren’t all that heavy-handed — he also called the euro’s recent rise a sign of confidence in the shared currency and noted it was trading near long-term averages — they were enough to cool euro bulls for the near term. The euro EURUSD -0.10% , which pushed above $1.37 earlier this week, changed hands at $1.3414 in recent trade, up from $1.3392 in late North American action Thursday. Although down about 1.6% just this week, the currency is still up more than 5% against the greenback compared with three months ago. “What we note is that the latest data shows the euro-zone is stabilizing. More work is needed, however,� said Evan Lucas, a market strategist at IG Markets. “Mario Draghi’s ‘whatever it takes’ comments that came [at midyear] last year was the flash point for the current rally and he is holding true to his word, meaning Europe is going to be a distraction, not a disaster,� Lucas said. The ICE dollar index DXY -0.20% , which measures the greenback against a basket of six major global currencies, rose to 80.036 from 79.721 late in New York on Thursday. The WSJ dollar index XX:BUXX -0.42% , a gauge that measures the greenback’s moves against a slightly wider basket of currencies, slipped to 71.32 from 71.66. Among other major currency pairs, the British pound GBPUSD +0.64% climbed to $1.5788 from $1.5696, while the Australian dollar AUDUSD +0.48% fetched $1.0337, compared with $1.0284. William L. Watts is MarketWatch's European bureau chief, based in Frankfurt. Follow him on Twitter @wlwatts. Varahabhotla Phani Kumar is a reporter in MarketWatch's Hong Kong bureau. Follow him on Twitter @MktwKumar.

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