It’s still amongst the hot topics several days after it happened, understandably.

Many of us would still like to know how much yen Japan’s Ministry of Finance bought in its concerted raid with G7 partners, commencing early in European trading hours on March 18th.

Japan’s Ministry of Finance will not officially disclose daily intervention amounts during the January-March period until the beginning of May.
 
But a yen market strategist at a large investment bank says it’s possible to make a ‘guesstimate’ of the size of daily interventions, using BoJ’s daily projections published on the BoJ’s site: “Sources of Changes in Current Account Balances at the Bank of Japan and Market Operations”
 
The analyst notes intervention transactions in the forex market are settled two business day later.
 
Therefore JPY supply through intervention on 18 March will be reflected in the item called “Treasury funds and others” in the projection for 23 March, which was released at around 1900 JST.
 
It showed “Treasury funds and others” amounted to Y0.83trn.
 
With money market experts having expected that item to be around Y0.3trn without intervention, the intervention by the Japanese authority on 18 March could be around only Y0.53trn ($6.5bn).
 
That would be much smaller than markets estimated on that day – around Y2trn ($25bn).
 
The exact figure won’t be released until May.
 
Till then, overestimation of the initial amount could raise fears about potentially more ‘killer’ intervention going forward, or if the above calculations are in the right ball park, indeed there could be actual weightier intervention down the line.
 
The net effect of either scenario could serve to cramp JPY to a degree in any case, till May at the earliest.

ThSM