Japan's Intervention Fails to Stem Yen's Decline as USD/JPY Rises Above 158.00
The USD/JPY exchange rate has been on the rise since September 24, trading above 158.00 and poised to post its first close above the 200-day moving average since September 4.
In an effort to stem the yen's prolonged depreciation and stabilize the foreign-exchange market, Japan's Ministry of Finance carried out a record-scale intervention between July 30 and August 26, spending 15.4 trillion yen to buy yen.
The intervention was joined by the U.S. Treasury on July 31, creating a coordinated effort that successfully kept the USD/JPY exchange rate below 160.00 for four weeks.
However, this measure has highlighted the fundamental shortcomings of Japan's foreign-exchange management, with the measures exhibiting a clear pattern of 'rising costs and diminishing returns.'