Traders of Japan’s currency became unusually fond of the Tokyo night air last year. Long after their colleagues had gone home, the traders left the grand investment houses that dominate the skyline of the Marunouchi financial district and strolled north for a block or two.
Once they reached the Beaux-Arts style Bank of Japan building, they would count the taxis parked outside. A lot of cabs meant the officials were working late. This, the traders speculated, meant they were planning an intervention in the currency market.
To aid Japan’s exporters, the central bank has loaded up on foreign currency in recent years to lower the yen’s value against the dollar. Although these interventions are not known in advance, the BoJ declares its foreign exchange purchases soon after making them.