UPDATE 1-IMF says no sign of repatriation lifting Japan yen

* IMF says yen broadly in line with long-term fundamentals

* Japan has ample resources to finance its rebuilding-IMF

(Adds details on recovery, deficit position)

WASHINGTON, March 24 (Reuters) – There is no sign that
Japanese insurers are selling foreign assets to pay rebuilding
claims, and even if they do, it will not materially affect the
yen’s value, the International Monetary Fund said on Thursday.

The IMF also said the Japanese yen was broadly in line with
long-term fundamentals despite the currency’s recent rise.

“We have seen no actual evidence of repatriation flows,”
said Mahmood Pradhan, the IMF’s Japan mission chief. “We do not
think that repatriation flows will be large enough to make a
material difference in the value of the yen over time.”

A sharp rise in the Japanese yen since the March 11
earthquake raised questions about whether Japanese businesses
were selling foreign assets or foreign insurers were seeking to
raise yen to meet obligations from the powerful earthquake and

Pradhan said it was difficult to tell if speculation was
behind the strengthening yen. He also said the intervention by
the Group of Seven rich nations to cap the currency’s rise was
appropriate since the exchange rate movements were “disorderly
and unhelpful.”

The IMF’s assessment of Japan’s economic damage was similar
to what many private economists have concluded. The economy
will remain weak until power supplies are fully restored, and
then it should strengthen as the country rebuilds.

The Fund said it would release a more detailed economic
assessment of Japan in April, when it publishes its World
Economic Outlook.

Pradhan said the current situation was “quite unique”
because of the combination of a natural disaster and a nuclear
crisis, and this made it unusually difficult to assess the
economic impact.

The biggest question mark is how long it will take to fully
restore power. The longer it remains constrained, the worse the
economic impact.

The IMF said rebuilding costs looked “manageable” and Japan
had ample resources to finance its own reconstruction despite a
heavy government debt burden.

Although the Fund has urged Japan to address its
longer-term fiscal problems, Pradhan said the immediate concern
was shoring up the economy because a prolonged slump would be
even more damaging to public finances.

“We do not see this reconstruction cost as adding
permanently to the fiscal deficit,” he said. “There will be a
time to come back to medium-term fiscal issues.”
(Reporting by Emily Kaiser; Editing by Padraic Cassidy)

UPDATE 1-IMF says no sign of repatriation lifting Japan yen