Huge FX Gains Are Japan’s Benefit From Intervention, Setser Says
- CFR’s Setser sees ‘clear financial gains’ from intervention
- Latest BOJ data suggests officials stepped in to support yen
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The Japanese government can expect to have realized “windfall” profits if officials did indeed intervene in currency markets by selling dollars and buying yen on Monday, according to Brad Setser, a senior fellow at the Council on Foreign Relations.
That’s because Japan holds a large amount of foreign currency-denominated assets bought when the yen was much stronger compared to levels today. Assuming intervention took place, Setser said, at the simplest level the Japanese authorities followed the most fundamental of investing strategies: buy low and sell high.