Currency intervention and the global portfolio balance effect: Japanese and Swiss lessons, 2003-2004 and 2009-2010
This paper shows that the Japanese and Swiss foreign exchange interventions in 2003/04 and 2009/10 seem to have lowered long-term interest rates in a range of industrial countries, including Japan and Switzerland. It seems that this decline was triggered by the investment of the intervention funds in US and euro area bonds and that a global portfolio balance effect made this decline in interest rate spread to other markets, thus easing monetary conditions at home and abroad.
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- Andreas M. Fischer, 2005.
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2005-02, Swiss National Bank.
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- Takatoshi Ito & Tomoyoshi Yabu, 2004.
"What Prompts Japan to Intervene in the Forex Market? A New Approach to a Reaction Function,"
NBER Working Papers
10456, National Bureau of Economic Research, Inc.
- Ito, Takatoshi & Yabu, Tomoyoshi, 2007. "What prompts Japan to intervene in the Forex market? A new approach to a reaction function," Journal of International Money and Finance, Elsevier, vol. 26(2), pages 193-212, March.
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