Why Japan Recently No Longer Intervene In Foreign Exchange

By Jerri Lily

Japanese yen continued to appreciate significantly. In addition to the process some time ago the yen the dollar index fell to a new high and again outside the U.S. in the last 2 stabilized index has stabilized, after most other non-US currencies have begun to fall, only the yen remains with the dollar strong.

So far, the yen has depreciated against the dollar this year, more than 13%. In order to curb the yen’s rapid gains for the dollar, the Japanese government in the Japanese yen in 15 years record breaking high after Sept. 15 had on Tokyo foreign exchange market intervention in the yen’s movements, spent about 200 billion dollars with selling yen to buy dollars at. After intervention, the yen has dropped in 3 hours, about 3%.

However, the Japanese government intervention in the yen lasted only two days. After the third day, the yen once again embarked on a gradual rising trend. From September 17 to October 18 a total of 22 trading days, in addition to only two days the yen fell slightly, the yen and the rest are in the 20 trading days up state.

October 6, the yen broke through 82.85 to the point. 82.85 It is the Japanese government on September 15 when the foreign exchange market intervention in the highest point. In the first intervention in the yen after the yen once again the face of steadily higher momentum, the foreign exchange market are worried that the Japanese government could intervene again. But the yen foreign exchange market recently has entered the 80.00-point mark near the highest point from the historical magnitude of less than 1.5%, while the Japanese government has yet to conduct a second intervention.

Temporarily tolerate the Japanese government once again the appreciation of the yen did not choose an immediate intervention because, in today’s international economic environment, the Japanese intervention in the foreign exchange market risk is too high, while the income is not determined.

The first is that many common currency against the dollar. Last week the dollar index hit a low of 76.144, corresponding to the number of international currencies against the dollar to appreciate significantly. Recently, the Australian dollar has broken through parity against the U.S. dollar is freely floating exchange rate in 1983 for the first time. Asian currencies have generally appreciated against the dollar, the Indian rupee against the dollar in just 30 days to more than 5%. Therefore, the appreciation of the yen, the dollar fell and global number of currencies against the dollar with the embodiment of one of the only, the appreciation of the yen against other currencies is not very obvious, so the Japanese government’s intervention is not in an emergency situation.

Followed by Japan, the effects of government intervention in currency markets has been unsatisfactory. The Government of Japan currency intervention in mid-September this year, before the middle of no more than 6 years intervened the foreign exchange market. Japan’s last intervention in the foreign exchange market around vigorously in 2003, spent a lot of money to intervene, although in the short term or temporary drop in the medium term on the yen, but in the long run, the Japanese government’s intervention is poor, no change in the yen the fundamental strength of the trend. Therefore, even if the recent Japanese intervention in the foreign exchange market again, the effect is also uncertain, likely to fail.

Japanese yen continued to appreciate significantly. In addition to the process some time ago the yen the dollar index fell to a new high and again outside the U.S. in the last 2 stabilized index has stabilized, after most other non-US currencies have begun to fall, only the yen remains with the dollar strong.

So far, the yen has depreciated against the dollar this year, more than 13%. In order to curb the yen’s rapid gains for the dollar, the Japanese government in the Japanese yen in 15 years record breaking high after Sept. 15 had on Tokyo foreign exchange market intervention in the yen’s movements, spent about 200 billion dollars with selling yen to buy dollars at. After intervention, the yen has dropped in 3 hours, about 3%.

However, the Japanese government intervention in the yen lasted only two days. After the third day, the yen once again embarked on a gradual rising trend. From September 17 to October 18 a total of 22 trading days, in addition to only two days the yen fell slightly, the yen and the rest are in the 20 trading days up state.

October 6, the yen broke through 82.85 to the point. 82.85 It is the Japanese government in September 15 when the foreign exchange market intervention in the highest point. In the first intervention in the yen after the yen once again the face of steadily higher momentum, the foreign exchange market are worried that the Japanese government could intervene again. But the yen foreign exchange market recently has entered the 80.00-point mark near the highest point from the historical magnitude of less than 1.5%, while the Japanese government has yet to conduct a second intervention.

Temporarily tolerate the Japanese government once again the appreciation of the yen did not choose an immediate intervention because, in today’s international economic environment, the Japanese intervention in the foreign exchange market risk is too high, while the income is not determined.

The first is that many common currency against the dollar. Last week the dollar index hit a low of 76.144, corresponding to the number of international currencies against the dollar to appreciate significantly. Recently, the Australian dollar has broken through parity against the U.S. dollar is freely floating exchange rate in 1983 for the first time. Asian currencies have generally appreciated against the dollar, the Indian rupee against the dollar in just 30 days to more than 5%. Therefore, the appreciation of the yen, the dollar fell and global number of currencies against the dollar with the embodiment of one of the only, the appreciation of the yen against other currencies is not very obvious, so the Japanese government’s intervention is not in an emergency situation.

Followed by Japan, the effects of government intervention in currency markets has been unsatisfactory. The Government of Japan currency intervention in mid-September this year, before the middle of no more than 6 years intervened the foreign exchange market. Japan’s last intervention in the foreign exchange market around vigorously in 2003, spent a lot of money to intervene, although in the short term or temporary drop in the medium term on the yen, but in the long run, the Japanese government’s intervention is poor, no change in the yen the fundamental strength of the trend. Therefore, even if the recent Japanese intervention in the foreign exchange market again, the effect is also uncertain, likely to fail.

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