Japanese monetary authorities think that their currency intervention would be very difficult without US support, confessed unnamed sources among the country’s officials. According to them, Japan will be forced to start selling national currency even not because its current rate is too high, but if the trade becomes volatile.

Effectiveness of the unilateral intervention may be low as it was in 2003 when the Bank of Japan sold 20.4 trillion yen and during its last 14.8 trillion yen intervention in 2004 when USD/JPY was trading at 109 yen.

Coordinated interventions, on the other hand, proved to be successful. They were held in 1995 to stop the greenback’s slump and in 2000 to support the introduction of the single currency. Never the less, overseas developed economies are in worse condition than Japan’s one. To recover they need weak currencies to stimulate exports, so Japan isn’t able to count on their help.



Chart. Daily USD/JPY

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