It’s gonna be tough for the BOJ/MOF to keep USD/JPY aloft.
The interventions seem to be little more than targeted bailouts to the exporters, these days. Here we are at the end of the month and the BOJ gooses spot to give the Honda’s and Toyota’s a better level to sell, essentially socializing private losses.
The reform efforts undertaken by the authorities in recent weeks like creating funds to encourage overseas M&A and the modest additions of liquidity to money markets by the BOJ have done nothing to hold back the tide of JPY strength. The intervention very likely won’t do the trick either.
Color me skeptical of the intervention having much impact beyond the next few days.
