Former U.S. Treasury Secretary Lawrence Summers said that currency interventions are ineffective at shifting exchange rates, even at the large magnitude that Japan has been thought to have deployed recently.
"Given the massive size of the capital markets, I think the evidence is reasonably clear intervention doesn’t work — even in the scales that the Japanese engaged,” Summers said on Bloomberg Television’s Wall Street Week with David Westin. "It’s just overwhelmed by the broad magnitude of private sector capital flows.”
The yen is heading for its best week against the dollar since 2022 after potentially two rounds of intervention by Japanese authorities. Policymakers likely spent some ¥9 trillion this week, or nearly $60 billion at current exchange rates, Bloomberg analysis of Bank of Japan accounts shows. That’s after the yen slumped on Monday to its weakest level since 1990.