When Yen Jawboning Isn't Enough, BOJ Rate Checks Loom: Primer
- Traders can get asked for yen-rate quote, causing FX spike
- Watch for any talk of rate checks when the yen is volatile
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The recent strengthening in Japan’s exchange rate is intensifying focus on the reaction of the country’s policy makers, who can draw on a broad spectrum of options generated from decades of experience with currency volatility.
First up is so-called verbal intervention, and the yen has already responded this year to at least one such episode. On Jan. 20, the currency slid after an unnamed government official said authorities were closely monitoring the foreign-exchange market.