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Intervention Policy of the BoJ: a Unified Approach

Author

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  • Michel Beine

    (Luxembourg School of Finance, University of Luxembourg and Free University of Brussels and CESifo)

  • Oscar Bernal
  • Jean-Yves Gnabo
  • Christelle Lecourt

Abstract

Intervening in the FX market implies a complex decision process for central banks. Monetary authorities have to decide whether to intervene or not, and if so, when and how. Since the successive steps of this procedure are likely to be highly interdependent, we adopt a nested logit approach to capture their relationships and to characterize the prominent features of the various steps of the intervention decision. Our findings shed some light on the determinants of central bank interventions, on the so-called secrecy puzzle and on the identification of the variables influencing the detection of foreign exchange transactions by market traders.

Suggested Citation

  • Michel Beine & Oscar Bernal & Jean-Yves Gnabo & Christelle Lecourt, 2007. "Intervention Policy of the BoJ: a Unified Approach," LSF Research Working Paper Series 07-19, Luxembourg School of Finance, University of Luxembourg.
    • Handle: RePEc:crf:wpaper:07-19
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    References listed on IDEAS

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    More about this item

    Keywords

    FX intervention; Secrecy Puzzle; Market Detection; Nested Logit.;
    All these keywords.

    JEL classification:

    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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