Japan's Yen Rescue Sparks Fears of Asian Financial Crisis Repeat

Japan's recent effort to prop up its currency has raised concerns about a repeat of the Asian financial crisis, according to former top currency diplomat Naoyuki Shinohara.

Shinohara, who served as Japan's vice finance minister for international affairs and deputy managing director at the IMF, said that the current situation bears little resemblance to traditional coordinated interventions.

The joint action by Japan and the US on July 31 to prop up the yen differs from previous efforts in several ways, including the lack of a shared assessment among major economies and a joint statement from the G7.

Shinohara also noted that the absence of central banks in this effort makes it less effective, as messaging is a key element of coordinated interventions.