In Japan Ichiro Ozawa from the Democratic Party who opposes prime minister Naoto Kan in September 14 party election for this position claimed that intervention to the currency market in order to prevent national currency from appreciation is quite possible. Many analysts believe that if Ozawa wins, USD/JPY may start unexpectedly climbing.

Specialists at Barclays Capital, on the contrary, bet on yen’s strengthening. According to them, even in case of Kan’s victory high political uncertainty may drive Japanese currency upwards as the probability of intervention declines.

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.



Chart. H4 USD/JPY

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