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Earlier today the yen dropped across the board when rumors that the Bank of Japan (BOJ) intervened to weaken its currency hit the forex streets.

After opening the week at a fresh 15-month low at 80.31, USD/JPY spiked up and soared to as high as 81.41 before settling just above 80.60.

Now now, don’t get too excited folks. As I’ve said, the intervention rumor is still unconfirmed, which means we need to keep our eyes open for any announcements from the BOJ officials.

Also, remember that Japanese Vice Finance Minister Fumihiko Igarashi mentioned yesterday that the BOJ can’t say in advance that it will intervene… For all we know, the strong move up that we saw was merely the work of some big investment firm taking profit off a huge long yen position!

But let’s ask the question anyway: Is another intervention from the BOJ really possible?

Recall that a few weeks ago, world leaders assembled at the G20 meetings held in South Korea. One of the hot topics of discussion was currency manipulation.

While many hinted at China for not allowing the yuan to appreciate, Japan seemed to get off the hook even though they directly intervened in the markets.

If you really think about it, the two aren’t really on the same boat. Japan intervened to protect its deflation-plagued economy, while China is accused of keeping the yuan low in order to gain a trading advantage. I’m sure the G20 can cut the BOJ some slack given the circumstances, don’t you think?

But even with the G20 looking the other way, the BOJ is still struggling to get the economy rolling.

We’ve seen moves ranging from extremely low-interest rates to asset purchase programs. They’ve practically thrown everything but the kitchen sink at it!

Another interesting turn of events during the G20 meetings was how U.S. Treasury Secretary Geithner expressed that the U.S. was against “disorderly movements” of exchange rates in advanced economies. By advanced economies, he’s probably referring to Japan.

Following this statement, USD/JPY shot up as traders took this as a cue that the BOJ may find support from the U.S.

As I’ve said in the past, coordinated efforts from multiple central banks have been much more successful than lone attempts at currency interventions.

Maybe one reason the yen has been unstoppable is because of how Japan’s export industry has been faring.

The BOJ claims it’s harming the industry, but the numbers seem to say it’s holding up quite well.

Thanks mostly to exports, Japan’s trade balance rose 54% year-on-year in September, expanding to 797 billion JPY.

True, the industry would probably be doing much better if it weren’t burdened by the yen’s strength. But it isn’t exactly gasping for air at the moment.

Secondly, the yen’s popularity has risen as QE part 2 looms just around the corner. Faced with a choice between the USD and the yen, investors would rather pick the Japanese currency.

And lastly, we cannot discount the fact that buying the yen is an excellent way of storing value. Inflation in Japan is about as low as it gets, close to 0%. Without high inflation eating away at your hard-earned savings, the value of your money stays intact.

As the yen continues to climb up the charts, maybe the question we should be asking isn’t whether the BOJ intervened or not.

Maybe we shouldn’t even be wondering how much longer the BOJ will allow the yen to rise. Maybe the question should be, “Is there anything the BOJ CAN do to stop the yen?”