The Financial Times (FT) carries an opinion piece from an analyst at Japan Macro Advisors, as he suggests that the Bank of Japan (BOJ) may have to resort to unconventional measures to stimulate growth while not ruling out the possibility of Yen intervention.
“Japan’s exports ‘have been plummeting in the past five months’.
Both private consumption and business investment in Japan contracted in the first quarter of 2019.
It is time for the BoJ to face the question again: What more can it do?
The Japanese government can intervene in foreign exchange markets by selling the yen, but past forex interventions proved ineffective when they were not supported by a consistent change in monetary policy.
A direct intervention also seems particularly risky in the era of Donald Trump, who has repeatedly accused China of manipulating exchange rates.
In the past, FX intervention tends to fail as soon as markets see that the international community does not support it.”