Commodity Daily News

Is the MOF Intervening in the FX Markets?

There have been reports both in the WSJ and in the local Japanese press that the Japanese Ministry of Finance continues to intervene in the forex markets without making a public announcement. The report can't be confirmed but if this is true then the “covert intervention” does not appear to be having much success as the typical one time interventions that the MOF has previously carried out.

Until Friday the USD/JPY had been stable near the 78 yen level with very little price movement seen in the pair. After the intervention in early August the yen quickly recouped its losses from the one time selling. Previous attempts to flood the spot market with yen did not succeed to weaken the Japanese currency. It is good to see the Japanese are making additional attempts to tackle yen strength. However, any success the Japanese MOF may have could be temporary given the long term downtrend of the USD/JPY.