Japan interveneret

Traders were encouraged when they learned just how
heavily Japan intervened on behalf of the yen last month,
without having much lasting impact, explained Earl Johnson,
foreign exchange economist with Bank of Montreal in
Chicago.
Japan's foreign currency reserves at the end of April
showed the first decline in four months, with reserves down
$17.835 billion. A Ministry of Finance spokesman said this
was the largest monthly drop ever and was due mainly due to
dollar-selling intervention to halt the fall of the yen.
"That shows they intervened very aggressively, and it
failed to keep the yen from weakening," said Johnson. "So
we're at a three-week high for dollar/yen."
Other analysts also pointed to continued weakness in
the Japanese economy, on the day after the U.S. government
reported 4.2% growth in gross domestic product in the first
quarter. Furthermore, they noted that today's data out of
Japan showed the propensity of the Japanese to save rather
than consume.
"Data out of Japan underlined the desperate state of
the economy," commented analysts at GNI Research.
Household spending in Japan fell in March from a year
earlier by an inflation-adjusted 5.7%. Meanwhile, domestic
new motor vehicle sales for April fell 7.4% from a year
earlier.
Meanwhile, postal savings in Japan grew 6.8% in April
from a year earlier to 241.91 trillion yen, topping the 240
trillion yen mark for the first time, the government
said.
GNI analysts did note, however, that Japanese exporters
are known to have left sell orders in dollar/yen above Y134
ahead of the four-day weekend, which could limit any upside
potential for the U.S. currency.