ZURICH: The Swiss franc fell with the dollar against the yen on Monday after the US Treasury Department said it was watching Japan's policies to make sure they were not aimed at weakening its currency. The yen had fallen sharply across the board last week after the Bank of Japan announced a radical reflationary policy, but bounced somewhat after the US Treasury Department said it would press Japan to let the market determine exchange rates. The franc fell 0.6 per cent against the yen to trade at 105.33 by 0628 GMT compared to Friday's New York close, while the Swissie was off 0.4 per cent against the greenback at 0.931. The franc was little moved against the euro at 1.2165. Markets will be watching for more comments on Japan when finance ministers and central bank heads of the Group of 20 leading economies meet in Washington on Thursday and Friday. "If the Japan bashing continues, the pressure on dollar-yen should continue until Thursday," Commerzbank analysts said. The franc shrugged off news that the Swiss government has a confidential emergency plan to stabilise the exchange rate in case the euro zone crisis worsens and the Swiss National Bank alone is no longer able to guarantee the rate. UBS economist Reto Huenerwadel said it was common knowledge that the Swiss had such plans at the ready, but said they were unlikely to need them any time soon given the fact that financial markets and the franc have stabilised recently: "While clearly not the most pressing issue given the largely stable situation in the franc exchange rate, discussions about additional measures to prevent the franc from strengthening further including the discussions about negative franc interest rates are likely to make regular reappearances going forward." The SNB capped the soaring safe-haven franc at 1.20 francs per euro in September 2011 to fend off deflation and a recession and has repeated ever since that it was ready to buy foreign currency in unlimited quantity to defend that level. SNB Vice-Chairman Jean-Pierre Danthine is likely to reiterate that stance at a speech in Geneva on Tuesday, followed by SNB board member Fritz Zurbruegg at an event on Thursday. The main Swiss economic indicators due this week are producer and import prices on Tuesday and the ZEW indicator on Wednesday.

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