How exactly does central bank intervention in forex work?

Discussion in 'Forex' started by Kubinec, Sep 15, 2010.

  1. Kubinec


    Just curious.

    Specifically, I want to know if they have a specific time of day when they will be intervening? :D

    This right here will be a money maker for some time to come. As long as they make injections like the one they did this night. Oh mama mia...

    yen has been a turtle all this time, now things changed.
  2. AK100


    One Swallow never makes a summer just remember that.

    The Yen is strong and has been strong for a reason so just because BOJ moves in doesn't really alter the market's internal structure that much.

    And don't forget the BOJ is nothing and I mean NOTHING against the market. Sure, it can set some fireworks off every now and then but when it stops what then...........See how successful the Swiss National Bank has been recenly, god knows how much money they've blown and it had NO impact over the long term but of course shook things up for a day or so now and then.
  3. Daniel12


    I agree with you however the question is. Do you ascribe the same power or lack of power to US central Bank ?

    And what would be ramifications of that :cool:
  4. Don't they need to sterilize the trades against something? Like issuing bonds to unwind the value of the yen?



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  6. i don't have the answer to your question
    i don't trade the yen but remember the last time they intervened, and while the
    BoJ announced is would be intervening, don't know there was a date and time
    pre-announcement for that intervention -
    but it would obviously be desirable information, to be able to make a mega-trade
    as well as protecting one's ass

    'Outline of the Bank of Japan's Foreign Exchange Intervention Operations' July 2000
    includes: 'A Day in the Life of the Bank of Japan's Foreign Exchange Dealers'
    by Masafumi Yamamoto, Foreign Exchange Division

    attached: 'Intervention Policy of the BoJ: a unified approach.'
    Michel Beine, Oscar Bernal, Jean-Yves Gnabo, Christelle Lecourt. Dec 22/06
  7. Kubinec


    Thanks Wallace.