Japan Intervened in Currency Market: Ministry of Finance

The transcript discusses recent interventions in the FX market by Japan's Ministry of Finance, highlighting a significant turnaround in the dollar-yen exchange rate. George Caravelas from Deutsche Bank provides an analysis, expressing skepticism about the effectiveness of these interventions due to a lack of coordination with the US and internal policy contradictions in Japan. The central bank is easing policy while the Ministry of Finance is attempting to strengthen the yen, leading to potential market confusion and limited impact.

What was the initial impact of Japan's intervention on the dollar-yen exchange rate?

• The dollar-yen rate remained unchanged

• The dollar-yen rate decreased by more than 1%

• The dollar-yen rate increased by 2%

• The dollar-yen rate increased by 1%

According to George Caravelas, why might the intervention be ineffective?

• It was too aggressive

• It was announced too late

• It was not coordinated with the US

• It was too small in scale

What is one of the main contradictions in Japan's policy as discussed in the third section?

• The central bank is raising interest rates while the MOF is lowering them

• The central bank is injecting liquidity while the MOF is trying to remove it

• The central bank is selling reserves while the MOF is buying them

• The central bank is strengthening the yen while the MOF is weakening it

What does selling reserves imply according to the third section?

• Buying more US Treasuries

• Lowering US yields

• Selling US Treasuries

• Increasing liquidity in the market

What does George Caravelas suggest about the scale of intervention needed to have an impact?

• A very large intervention is required

• A coordinated intervention is unnecessary

• A small intervention would suffice

• No intervention is needed