The empirical analysis of the effects of foreign Exchange Intervention and Monetary Market Operations by Bank of Japan

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We composed the new original data base as follow;1) Survey data on the foreign exchange market in Japan2) Data of actual interventions and oral intervention in foreign exchange markets1) The features of foreign exchange rate expectations by using survey dataIn a previous study of survey data on the foreign exchange market in Japan, we mainly used the Japan Centre for International Finance (JCIF) survey. The findings of studies that have used survey-based expectations are robust only if the JCIF survey reflects market expectations correctly. As the JCIF survey has been the only available data for some time, it is difficult to determine whether it correctly reflects market expectations and thus we use the World Economic Information Services (WEIS) survey.On the JCIF survey, there is a clear difference between short-horizon and long-horizon expectations. But, the WEIS does not exhibit this gap. According to the unbiasedness test, in the WEIS survey, the test is not rejected. This suggests that forecasting performance depends on information-gathering capacity when respondents to the survey make forecasts. The WEIS survey essentially represents rational expectations.2) The Comparative Analysis of the Effects of Foreign Exchange Intervention in the late-1980s and 1990sThis paper analyses whether actual interventions and oral intervention in foreign exchange markets are effective in the late 1980s. We use the reports of interventions in the financial press.The impacts of intervention information in the late-1980s were as follows; Oral interventions were more significant and sustainable than the reported intervention. Reported intervention was significant in case of the US dollar bought.Despite the large volume of information on actual and oral interventions were reported in the Tokyo market, the effects of communication in foreign exchange market was not effective influencing exchange rate, because of policy inconsistency between different countries.