Analysts at Barclays Bank Plc. in Tokyo claim that Japan can make the intervention to the currency market effective by performing it in the unsterilized way.

In other words, after selling the national currency the country’s monetary authorities should leave extra liquidity in the financial system instead of draining it through bill sales, recommend the specialists. As a result, the Bank of Japan (BOJ) will be able to combine out intervention with monetary easing that might cause strong feedback from the market.

However, Barclays’ strategists underline that if Japanese central bank carries out unsterilized intervention under government pressure, it will show the lack of independency from the policymakers. The analysts believe that the BOJ will try to avoid such outcome.

On August 24 yen climbed to the maximal level since June 1995 at 83.60 yen per dollar under the impact of global risk aversion. The last time when Japan intervened at currency market was in March 2004 when the yen traded at about 109 per dollar. Strategists at Nomura Securities Co. in Tokyo believe that Japanese monetary authorities if the pair USD/JPY falls to 82-83 yen.

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