Just a snippet from Reuters about yesterday's yen-dollar no-contest to illustrate what I have been saying in earlier posts.
The dollar hit a 10-month low versus the yen on Wednesday in a rapid sell-off that tested Japan's resolve to protect its vital export sector by keeping its currency weak against the greenback and the euro. "I think the fear of intervention is keeping the dollar above 116 yen at this point," said Larry Brickman, currency strategist at Bank of America in New York.In January and February, Japan's central bank intervened by selling yen for dollars, catching many investors off guard. On Wednesday traders said they could not detect intervention by Japanese authorities to stop the sharp dollar decline, which makes Japan's exports less competitive on the world market. "We do think intervention risks are significant given the pace of the dollar/yen fall," said Rebecca Patterson, global currency strategist at JP Morgan in New York. She said the lack of comments from Japanese policymakers on the yen's strength has emboldened shorter-term investors to sell the dollar. At the same time comments this week from U.S. officials supporting a strong dollar policy did little to slow the dollar sell-off, and some analysts were calling them hollow. The dollar fell as low as 116.10 yen on Wednesday before trimming its losses to trade at 116.41 yen, a loss of 0.85 percent from Tuesday's New York close. The euro was also affected by the silence surrounding the yen's strength, falling 1.66 percent against the Japanese currency to trade at 132.20 yen .
Source: Reuters News
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