US and Japan Ready to Intervene Again if Yen Resumes Downtrend

Japan and the United States are prepared to intervene in the currency market again if the yen shows signs of resuming its downtrend. This warning comes from Atsushi Takeuchi, a former Bank of Japan official who took part in several yen-selling interventions between 2010 and 2012.

According to Takeuchi, the recent joint intervention by Japan and the US was highly effective in creating market perceptions that one-way weakening of the yen will not continue. He attributes this success to the backing of the United States, which can obtain unlimited amounts of dollars.

The fact that the US stood behind Japan and took action has significant symbolic meaning, Takeuchi said. If he were running a hedge fund, he wouldn't think about making bets on dollar-yen now, he added.