Japan's Yen Rescue Sparks Memories of Asian Financial Crisis

Japan's latest effort to prop up the yen has sparked memories of the Asian financial crisis in the late 1990s, according to Naoyuki Shinohara, a former top currency diplomat. The operation bears little resemblance to traditional coordinated interventions.

The situation brings back memories of Thailand, which received dollar funding from the United States, Japan, and the International Monetary Fund (IMF) to bolster its foreign reserves during the Asian financial crisis.

Shinohara said that Japan's current dynamic is 'uncomfortably similar' to that period. The joint Japan-U.S. action on July 31 to prop up the yen differed significantly from traditional forms of coordinated intervention, he noted.

'There is no sign that such a process took place this time,' Shinohara said. Normally, there would be a joint statement from the G7 at some stage, but one has not been seen yet.