The Bank of Japan's intervention aimed to support the free-falling yen has led currency investors to speculate on what the next action will be on the dollar's skyrocketing growth.
Analysts said the BOJ's actions, which sent the dollar down 2% on Thursday, were unlikely to work. They pointed to a history of interventions that depleted foreign exchange reserves and, if not backed up by policy shifts, rarely changed the situation.
Mark Dowding, chief investment officer of BlueBay Asset Management, said his fund closed its long position on the yen with modest returns. He considers the yen as undervalued, but isn’t ready to buy until monetary policy changes.
Lansioni of Neuberger noted that this week's intervention would make a difference, turning the dollar/yen into a "two-way trade" by reducing some impulse and speculative trades.