Yen Intervention Fails to Reverse Trend, Loses Half of Gains in Just Seven Days

The Japanese yen has given back half of its gains from the largest-ever intervention in just seven trading days, raising questions about the effectiveness and sustainability of such measures.

The joint US-Japan intervention at the beginning of this month involved purchasing approximately 13.75 trillion yen, setting a single-day record, but the exchange rate has since retraced to 159.50, implying that about 4.5 yen of that gain has been erased by the market.

Mitsuhiro Furusawa, Japan's former top foreign-exchange official at the Ministry of Finance, warned that U.S.-Japan joint intervention could be re-initiated 'at any time' if the yen were to fall back to its pre-joint-action level from last month.