Joint Yen Intervention Falls Flat: Experts Warn of Transitory Boost

The recent intervention on the yen by the US Treasury and the Japanese Finance Ministry has sent shockwaves through global markets. On August 3, the two countries jointly intervened in an effort to stabilize the currency.

However, experts are cautioning that this move may not have the desired effect for long. The estimated $88 billion intervention over two days is seen as a relatively small amount compared to the size of global markets.

The Bank of Japan (BOJ) can buy yen and securities to push up the currency, but investors may simply sell corresponding amounts of yen securities if they believe fundamental conditions have not changed.