The yen will rise beyond its postwar high of 79.75 versus the dollar and stay stronger than 80 this year because of structural weakness of the U.S. economy, said Eisuke Sakakibara, formerly Japan’s top currency official. “The U.S. still faces a balance-sheet problem, with businesses saddled with bad loans and households with excess debts, so the sustainability of recovery is still doubtful,” Sakakibara said last night at an event hosted by the Tokyo Foreign Exchange Market Committee and the Forex Club Japan. “The dollar’s downward trend will continue over the medium to long term.” Sakakibara, 69, said that Finance MinisterYoshihiko Noda should declare that a strong currency is in Japan’s interest. Sakakibara became known as “Mr. Yen” during his 1997-1999 tenure at the Ministry of Finance for his efforts to influence the yen rate through verbal and actual intervention in the currency markets. The yen reached 80.22 per dollar on Nov. 1, the strongest since April 1995 and short of the postwar record reached in the same month. Sakakibara said in September after the nation’s first currency intervention since 2004 that such efforts to weaken the yen would fail to stop its gain to a record in 2010. The yen traded at 83.29 per dollar as of 12:27 p.m. in Tokyo after reaching a two-month low of 83.98 last week. The currency will decline to 86 per dollar by the middle of this year and to 89 by year-end, according to median forecasts of economists and analysts in a Bloomberg survey. Large Japanese companies are weathering the yen’s impact on exports, and the currency’s strength will help fuel investments and mergers overseas, said Sakakibara, who is now a professor at Aoyama Gakuin University in Tokyo. U.S. preeminence in the global economy appears to be ending, while Europe’s economy is showing signs of collapse because of the debt crisis in peripheral nations, Sakakibara said. The center of the global economy is shifting to Asia -- primarily China and India -- and Asian currencies will advance against the dollar and the euro over the long term, he said. To contact the reporter on this story: Shigeki Nozawa in Tokyo at snozawa1@bloomberg.net. To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net

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