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Bush's slip in Japan causes run on the yen

Rupert Cornwell
Monday 18 February 2002 20:00 EST
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The real Bush is back. After five months of prosecuting a war, and displaying unaccustomed verbal fluency, George Bush has recovered his once-legendary talent for "mis-speaking", and provoked a mini-foreign exchange crisis.

The excitement began when the President told a press conference in Tokyo that he had discussed "devaluation" with Junichiro Koizumi, the Japanese Prime Minister. The markets instantly marked down the yen to 132.80 to the dollar, forcing the White House to say that what Mr Bush had intended to say was that other economic D-word, "deflation".

Within minutes the Japanese currency had recovered to 132.62 to the dollar. In Tokyo, Mr Bush moved to repair the damage, expressing his confidence that Mr Koizumi could revive the Japanese economy, and lauding him as "a great reformer".

A prime purpose of his trip is to drum up support for widening his campaign against terrorism. But his "axis of evil" speech caused consternation in Mr Bush's next port of call, South Korea. Naming North Korea as a paid-up member of the "axis" was a setback for the South's President, Kim Dae Jung, and his "sunshine policy" of seeking a more trusting, normal relationship with the North. Though most of his people want this, the White House, apparently, does not.

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