Why haven't the Japanese authorities taken action to support the yen yet? Interest rate disparity is a key factor

On April 29th, the dollar broke through the 160 mark against the yen in Asian trade, which has exceeded the level touted as Japan's "red line". The speed of the yen's decline has left traders questioning when Japanese authorities may start to support the yen, and why they have not yet acted. Jane Foley, head of foreign exchange strategy at Rabobank, said that for foreign exchange intervention to successfully reverse the trend of the United States and Japan, the improvement of Japanese economic data is likely to have to be matched by slower economic growth in the United States and less price pressure. This means that the efforts of Japanese authorities to try to scare off speculators may continue for several weeks. In addition, another reason for Japan's apparent reluctance to act may be that intervention alone cannot change the huge interest rate gap , which has contributed to the yen's decline. Although the Bank of Japan has ended negative interest rates, it is still far from the level that will attract investors away from high yields in the United States and other countries.