Examine an episode of large-scale interventions by the Bank of Japan’s (BOJ) in the yen-dollar foreign exchange market. Plot between January 2003 and January 2005 a measure of BoJ intervention (FRED code: JPINTDUSDJPY). Do positive values of the intervention indicator reflect purchases or sale of yen by the BOJ? What was the BOJ’s policy objective? To investigate whether the intervention of 2003-2004 was effective, add the Japanese yen-U.S. dollar exchange rate (FRED code: EXJPUS) to the chart, but scaled on the right axis.
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