What to make of the never-ending “yentervention” cycle

With the USD/JPY rate edging its way through another “line in the sand”, a further round of intervention from the Japanese authorities may well be in the offing. As the past few years have demonstrated, that alone is unlikely to generate a sustained turnaround. But between Japan’s still-plentiful FX reserves, its willingness to use them, and the yen’s apparent undervaluation relative to economic fundamentals, our sense is that a further major slide in the yen remains unlikely.