US Yen Intervention on Verge of Collapse Amid Credibility Crisis
UK-based de Vere Group's CEO Nigel Green has expressed concerns that the historic US yen intervention is on the verge of failure. The move, which saw the US buy yen for the first time since 1998 to support the currency alongside Japan, has already seen the yen weaken past 159 per dollar, a level it reached in July after the intervention.
Green points out that this weakening is a sign that the intervention is not holding up. 'A currency defence that gives back half its gains within weeks is not holding. It is failing in slow motion, and the pace of that unwind is genuinely alarming,' he said.
The CEO believes that the timing of the Bank of Japan's response was crucial to the success of the intervention. He claims that Japan 'blinking' on the same day the US made its first currency intervention in nearly three decades, missed an opportunity to back Washington's move with its own action.