Stealth intervention would be costly

With the yen falling to a 24-year low against the dollar, the government this week requested exchange rate quotes from the banks which some see as a precursor to intervention. Apart from the Ministry of Finance using the official foreign exchange reserves to support the yen, there are some other options to return funds invested abroad to Japan. However, the case for doing so isn’t compelling. The upshot is that there is no easy way to prevent the yen from weakening further if overseas interest rates continue to surge.

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