JPY trend won’t change with interventions – Commerzbank

The Japanese Ministry of Finance talked about the BoJ intervention on 31st October of 2011, letting know about 103 billion more yen (203 to 306bn) sold during the four following days. Commerzbank analysts’ see these “low volumes” as an act of prevention against buyers, impeding a retracement: “The “secret” interventions in the time between 1st and 4th November are more likely to have been a measure to “fine tune” which was intended as a measure to prevent the effects of the intervention from wearing off immediately”, says Ulrich Leuchtmann.

Although in the near term these measures have the wanted effect, Commerzbank analysts don’t see it able to change a trend in the medium term: “Japan’s strategy of leaning against the wind will not produce a trend reversal in the yen exchange rates”.

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