It does not require a financial detective to work out what is going on. Three sudden surges in the value of the yen, on July 11th, 12th and 17th, have raised suspicions that the Bank of Japan (BoJ) is again intervening in currency markets (see chart). The bursts have left the currency, at ¥156 to the dollar, up by 4% against the greenback and marginally above the 37-year lows it reached earlier this month.
Preliminary data suggest that the central bank sold over $35bn of foreign-exchange reserves on July 11th and 12th (the scale of the most recent apparent intervention remains unclear). These sales would add to over $120bn of intervention in the past two years, more than half of which occurred between late April and late May. Such moves burn the fingers of currency traders. They are unlikely to have a long-term impact on the exchange rate, however, which will disappoint officials and delight the tourists now flooding Japan.
