Market analysis: Joint intervention by Japan and the US in the yen faces high barriers to entry and is unlikely to occur in the short term.

Market analysts say the New York Fed's currency check last Friday was the clearest signal yet that Japanese and U.S. authorities are cooperating closely to curb the yen's depreciation, keeping the market highly wary of intervention. However, direct coordinated intervention may not happen as quickly as expected. Junya Tanase, chief foreign exchange strategist for Japan at JPMorgan Chase, said, "Past coordinated interventions have only occurred in extremely rare circumstances. There is still a considerable distance between joint currency checks and genuine coordinated intervention." Shota Ryu, foreign exchange strategist at MUFG Morgan Stanley Securities, said, "The U.S. may not be willing to buy a currency that has depreciated for five consecutive years. It might coordinate a small-scale intervention, but it is unlikely to take action that fundamentally reverses the yen's downward trend." If Japan continues to intervene, it will need to sell some of its U.S. Treasury holdings, which could push up U.S. Treasury yields—an outcome the U.S. may not want to see given the already volatile market. Further dollar weakness could fuel the renewed "sell U.S." trade that heated up last week. "Given concerns about global de-dollarization, the US is unlikely to directly intervene in a dollar sell-off," said Takuya Kanda, an analyst at Gaitame.com. (Jinshi)