The Japanese yen weakened through 150 per US dollar for the first time since 1990 yesterday. Did the Bank of Japan (BoJ) intervene? In truth, nobody knows, economists at Commerzbank report.

Hidden interventions cannot be systematically successful

“Did the BoJ intervene at 150 or not? One of my colleagues is convinced that it did, I am convinced that it didn’t. But in truth nobody knows. Neither the BoJ nor the MOF have commented. And everyone seems to interpret price developments differently.”

“USD/JPY rose above the 150 level in the course of yesterday evening and is currently holding above this level. This provides an argument that the BoJ has not intervened. However, this cannot be ruled out completely, because the BoJ may be pursuing a ‘leaning against the wind’ strategy. It may have intervened, but still allowed this mark to be broken. If the BoJ intervened on the market then it was only secretly and timidly.”

“If the FX market really has been dis-regulated to such an extent that ‘proper’ interventions do not work any longer then it is no longer possible to control exchange rates. I cannot imagine that hidden interventions can be systematically successful.”