Yen intervention action has no effect

Japanese yen against the dollar recently hit a 15-year high. While Japan's financial officials frequently let it out, said they did not want to see a significant appreciation of the yen, but does not exclude, if necessary, intervene if the yen gains. But Japanese officials have the words, since the foreign exchange market is the largest number of "warning" role, or even that much, even a little bit of "deterrent effect" did not.

Japan's central bank governor and finance minister, perhaps, a little embarrassed, because his statement did not set off a little ripple in the market. Federal Reserve Chairman Ben Bernanke is often a vaguely worded speech, can lead to multi-market speculation and comments, it is estimated that more Japanese counterparts envy.

Japanese financial officials are saying, the reason why the market turned a deaf ear, which is the current international economic context and within the political and economic situation in Japan is inseparable. First of all, if not with the Federal Reserve and European Central Bank, Bank of Japan intervention in the foreign exchange market action alone will not work.

Currently, the United States and Europe's economy is still sluggish, the Fed monetary policy, often referred to the next words carefully, for the quantitative easing policy of not lightly quit. For many European countries, they are hoping to sluggish euro, could save Europe's competitiveness, increase export and employment in Europe. Therefore, if the Bank of Japan put in a separate attempt to increase impact of the yen when the yen, the Fed and the ECB is unlikely to turn a blind eye. If the Fed or the European Central Bank also increased the money supply on the market, then the Bank of Japan intervention effect tends to zero.

Second, Japan's ruling party in disputes within the Democratic Party, making the effectiveness of the current policy of the Bank of Japan greatly reduced.

Ichiro Ozawa, Japanese politics dignity in that will participate in the Sept. 14 Democratic Party held the first election, incumbent Prime Minister, Naoto Kan to launch competition. Since the Democratic Party holds a majority position in the House of Representatives, the New Party will become the first new Japanese Prime Minister - unless the Democratic party in this war led to confusion, caused Congress to create a political wave of restructuring and the power struggle. In this context, Naoto Kan is equivalent to the current government, led by caretaker, so the latest decision of the Bank of Japan will be the economic impact of close to zero. Although the Bank of Japan policy board has decided at an emergency meeting on domestic financial institutions to 10 trillion yen further payment of 6-month loans, but mostly symbolic move.

Again, if the Japanese government's intervention did not play the desired results, then, it will trigger the market buying the yen, further pushing up the yen.

Although the speech failed to work in the market, but the Japanese government has had to intervene in the yen as a slogan often mentioned. Japanese Prime Minister, adding that rotation of a revolving door, with the Japanese economic recession, and let the public lose confidence are inseparable. Japan's current prime minister, Prime Minister Naoto Kan To firmly secured location, must be on some of Japan's economic problems head-on, such as the Japanese economy now faces the problem of deflation. The yen's appreciation will be further input to the deflation in Japan. Although little effect, but the Japanese government will no doubt continue to market propaganda, try to curb the yen's appreciation.

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