Yen Intervention Falls Flat as History Suggests Radical Policy Shift Required

The recent intervention in the Japanese Yen has raised eyebrows given its swift decline. However, history suggests that such actions are unlikely to change the currency's direction.

This is not an isolated incident; Japan's long history of foreign exchange intervention has seen no instances where a single action has altered the path of the Yen.

The only instance where Japan successfully changed the direction of its currency was through a radical shift in policy at the Bank of Japan (BoJ) under Haruhiko Kuroda. His aggressive 'quantitative and qualitative monetary easing' (QQE) flattened Japan's yield curve, causing the Yen to strengthen.