Analysts at BMI, a subsidiary of Fitch Solutions, said the coordinated intervention of the US and Japan in the yen would buy time, but could not reverse the structural forces driving the depreciation of the yen. Actions supported by the US have more weight than Tokyo acting alone, and promises to take further action can scare speculators. However, BMI said any contribution from the United States may be limited in size. Washington intervened by selling the euro instead of the dollar, using the Treasury's Foreign Exchange Stabilization Fund, which has limited firepower. BMI expects the yen to gradually weaken and fall to the level of 164 yen per dollar as large interest spreads support arbitrage transactions. The outflow of structured capital due to household purchases of foreign stocks, as well as the decline in corporate profit repatriation, will also act as a drag.

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