JAPANESE Prime Minister Shinzo Abe has ruled out intervening in currency markets to halt a surge in the yen, despite the unit sitting near a year-and-a-half high against the U.S. dollar yesterday.

    Huge volatility on equity markets driven by worries about the slowdown in global growth have sent traders scurrying for the Japanese unit, which is considered a safe bet in times of turmoil.

    The currency’s turnaround is bad news for the profitability of Japanese exporters and Tokyo’s broader attempts kickstart the world’s third-largest economy.

    But, in an interview with The Wall Street Journal, Abe ruled out stepping into foreign exchange markets to reverse the yen’s rise.

    “Whatever the circumstances, we must definitely avoid competitive devaluation, and I think we should refrain from arbitrary intervention in currency markets,” Abe said in response to questions about the yen’s recent advance.

    His remarks supported the unit, which Tuesday briefly broke the 110 level against the dollar for the first time in 17 months, erasing most of its losses since the Bank of Japan expanded its monetary stimulus program in October 2014.

    The stimulus is a key plank of Abe’s program, dubbed Abenomics, to boost Japan’s economy.

    In Tokyo afternoon trading, the yen sat at 110.38 against the greenback, compared with 110.28 yen Tuesday in New York, where it fell below 110 yen. The dollar has tumbled from more than 114 yen since the start of the year, when world markets were hammered by worries over global growth.

    “Recent market moves add to the growing sense that Bank of Japan Governor Haruhiko Kuroda’s easing program and Abenomics have both run out of options,” Yasunari Ueno, chief market economist at Mizuho Securities, said in a commentary. (SD-Agencies)