Japan intervenes to prop up the yen

LONDON/TOKYO(Reuters) -Japan intervened in the foreign exchange market on Thursday for the first time since 1998 to shore up the battered yen, in the wake of the central bank's decision to maintain ultra-low interest rates that have hammered the currency. [nL1N30S30X]

"We have taken decisive action (in the exchange market)," vice finance minister for international affairs Masato Kanda told reporters, responding in the affirmative when asked if that meant intervention.

The yen jumped by as much as 2.2% against the U.S. dollar to around 140.31 yen after the announcement. The Bank of Japan's commitment to super-low interest rates had weighed on the Japanese currency, which has lost 22% in value this year.

Earlier on Thursday, the currency hit a 24-year low of 145.90 against the dollar. It was last up 0.8% on the day against the dollar at 142.90 and up 0.5% against the euro at 140.99. [FRX/]

"This sort of intervention will not be able to overpower the discrepancy in monetary policy between the U.S. and Japan … Where you can really move the needle, comes when you have an increment in interest rates."

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