The Yen-Dollar Rate : Have Interventions Mattered?

Using daily data for 1995-99, this paper estimates a simple forward looking model of the exchange rate to show that foreign exchange interventions have, on the whole, had small but persistent effects on the yen-dollar rate. Contrary to conventional wisdom, sterilized interventions have mattered. Consistent with conventional wisdom, coordinated interventions have a higher probability of success and move the yen-dollar rate by a larger margin than unilateral interventions. A probit model indicates that both an excessive appreciation and depreciation of the yen provoke interventions, and that interventions occur in clusters-if there is one today, there will likely be another tomorrow.
Publication date: June 2000
ISBN: 9781451851816
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Money and Monetary Policy , Money and Monetary Policy , International - Economics , International - Economics , Interventions , expectations , foreign exchange , exchange rate , foreign exchange interventions , foreign exchange markets , Japanese Yen , U , s , Dollar

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