BOJ finally intervened to weaken the yen on the heels of Prime Minister Kan's pledge. All the yen pairs are currently up anywhere from 150 to 200 pips while the dollar has strengthened. I had shied away from buying the yen for the past couple of weeks and I will continue to stay on the sidelines for the time being. I remain skeptical of the intervention and continue to believe that it will fail to curb the currency when it's all said and done. The government has $700B unrealized losses in its FX account, and the intervention will add to its fiscal burden. This will decrease the attractiveness of Japanese bonds, and potentially push interest rates higher (barring further quantitative easing), which could make the deflation problem worse. These politicians just did what they do best, which is kicking the can down the road...
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