Further action on the yen?

Japanese Prime Minister Naoto Kan has warned he is ready to intervene again on the yen saying such action would be unavoidable “if there is a drastic change in the currency.” International Relations professor William Grimes is Director of the Center for the Study of Asia and a specialist in Japanese and East Asian political economy. His latest book is “Currency and Contest in East Asia.” He offers the following comment on the possible action by PM Kan.

“The threat to intervene again if the yen strengthens is not surprising. Previous announcements made clear that the Japanese government was prepared to fight yen appreciation, and with over $1 trillion in foreign currency reserves there is plenty of ammunition.

“Unsterilized intervention is, practically speaking, the simplest and probably most effective way of carrying out quantitative easing.”

Contact William Grimes, 617-353-9410, wgrimes@bu.edu

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