By TraderVox.com
The data showed that the ministry injected 1.02 trillion yen into the market during the initial four days of November. This followed an 8.07 trillion yen selling it conducted at the end of October last year after the Yen climbed to post WWII high of 75.35 yen per dollar. Due to a strong yen, exporters such as Honda Motor Co. and Sharp Corp. had recorded decreasing profits.
Analysts are saying that Japan intends to make more such interventions to stop the yen from getting stronger despite the growing concerns of interventions in the market. These sentiments are derived from the Finance Ministers Jun Azumi’s comments that the November unannounced intervention was the most effective strategy of weakening the yen. The minister also added that he wouldn’t rule out any measures to curb the yen from growing stronger.
Despite the growing criticism of Japan’s action from US, analysts are claiming that these are some of the strategies that Japan has used before to keep the yen at low level against the dollar. The first intervention in 2011 was done on March 18th and was worth 692.5 billion yen. This was a coordinated intervention efforts that were lead by bank of Japan together with seven nations to counter the strength of the yen. The yen had grown stronger after the strong earthquake struck the country leaving the investors speculating that companies would send back overseas assets to pay for rebuilding. The Finance minister then ordered the bank of Japan to make another intervention on August 4th.
Despite these efforts, the Yen has continued to remain strong recording a high of 76.03 yen per dollar on Feb. 1 this year. This was its strongest showing since its post World War II high on October 31st. Today, the yen opened trading at 76.72 in Tokyo. With the finance minister’s remarks in mind, another intervention might be on the way.
Article provided by TraderVox.com