Japan keeps market edgy after nearly $100b intervention

TOKYO, Nov 1 (Reuters): Japan kept markets on edge Tuesday saying it was ready to step into foreign exchange markets again to curb speculation a day after it sold a record of nearly $100 billion worth of yen to tame its high-flying currency. Tokyo intervened after the yen repeatedly hit record highs against the dollar, adding to authorities' concerns that excess speculation was driving up the yen and hurting the export-reliant economy if the gains were left unchecked. Bank of Japan (BoJ) money market data released Tuesday suggested that around 7.7 trillion yen ($98.7 billion) was sold in Monday's intervention, well above previous record of 4.5 trillion yen set in August. "We are engaging in a war of nerves (with markets) and we will make timely and appropriate decisions," Finance Minister Jun Azumi told reporters after a cabinet meeting. Following intervention the dollar rallied as high as 79.55 yen Monday, a three-month peak, after brushing a record low of 75.31 yen. The US dollar was trading at around 78.08 yen Tuesday after briefly touching 79.10 yen. Tokyo's second intervention in less than three months and its third this year, followed repeated warnings about the yen's negative impact on the economy and came just ahead of the Group of Twenty (G20) summit in Cannes, France on November 3-4. The summit will focus on Europe's efforts to contain its sovereign debt crisis and avoid a repeat of the financial shock that roiled markets after the Lehman Brothers collapse in 2008. But many market players had thought Tokyo would hold fire before the talks, worried that an intervention may irk its G20 partners as they grapple with sagging growth and exports.