By Sachiko Sakamaki and Takashi Hirokawa Dec. 3 (Bloomberg) -- The yen’s surge to a 14-year high was exacerbated by confusing comments from Japanese Prime Minister Yukio Hatoyama’s government as to whether it would take action to halt the advance, opposition leader Sadakazu Tanigaki said. “When the yen surged, remarks that suggested the authorities may tolerate it prompted misconceptions,” the former finance minister said in an interview at his office in Tokyo today. “When there are rapid moves that disrupt the economy, you need to take a stance that you will do whatever is needed.” Japan’s currency rose to 84.83 per dollar on Nov. 27, the highest since July 1995, following shifting comments by Finance Minister Hirohisa Fujii over whether he was prepared to intervene by selling yen. Deputy Prime Minister Naoto Kan downplayed the possibility, while Hatoyama reiterated several times that rapid currency fluctuations were “undesirable.” The yen’s advance prompted Financial Services Minister Shizuka Kamei in an interview yesterday to call on the government to ask the U.S. and Europe to join in coordinated action to weaken the currency. Tanigaki, who was finance minister from 2003 to 2006, said “intervention without international coordination may not be effective.” Tanigaki, 64, was chosen to lead the Liberal Democratic Party of Japan in September after it was ousted from more than 50 years of almost unbroken government control by Hatoyama’s Democratic Party of Japan. The LDP holds a quarter of the seats in the lower house of parliament and a third of those in the less-powerful upper house. Hatoyama’s Stimulus Hatoyama is set to announce his first stimulus package tomorrow amid signs that a recovery in the world’s second- largest economy is losing momentum as prices fall. Tanigaki criticized the administration for cutting 3 trillion yen ($34 billion) from predecessor Taro Aso’s aid package, and called on Hatoyama to restore the measures. He also said the government needs to put forth a “mid- to long-term fiscal plan” to address falling revenue. Hatoyama and Fujii have said the government will try to keep new bond sales for the fiscal year beginning in April at less than 44 trillion yen in an attempt to rein in a public debt that’s approaching 200 percent of gross domestic product. “The government needs to do more than saying how many government bonds will be issued because tax revenues are dropping,” said Tanigaki, who advocated fiscal restraint as finance minister. While praising the Bank of Japan’s decision this week to begin a 10-trillion-yen lending program for commercial banks, Tanigaki said the impact will be muted without an aggressive stimulus plan. To contact the reporter on this story: Takashi Hirokawa in Tokyo at thirokawa@bloomberg.net. Sachiko Sakamaki in Tokyo at Ssakamaki1@bloomberg.net.

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