Reply #44: Yen intervention hasn't hampered Fed--Greenspan

[UpInArms]

http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=6068713

WASHINGTON, Aug 25 (Reuters) - Foreign exchange intervention by Japan may have weakened the yen against the dollar and lowered U.S. interest rates, but it has not "hampered" the Federal Reserve's ability to conduct monetary policy, Fed Chairman Alan Greenspan said.

"The operations of the Japanese have not hampered the Federal Reserve in its efforts to conduct monetary policy to achieve price stability and maximum sustainable growth for the U.S. economy," Greenspan said in a written response to a question submitted in connection with a July 20 hearing held by Senate Banking Committee.

In his response, which was released on Wednesday, Greenspan said Tokyo's dollar buying -- which analysts widely viewed as an effort to weaken the yen -- "may have influenced some U.S. asset prices."

"In principle, the Japanese operations would have weakened the yen against the dollar, and it is possible that the operations did so, although the size and persistence of any effects are difficult to judge," he said.

Greenspan added that despite large-scale foreign-exchange intervention by Japan both this year and last the yen had strengthened against the dollar from its early 2002 lows.

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I want some of what he's smokin'!