BIS on the role FX intervention plays in modern monetary policy

A paper published on Sunday by the Bank for International Settlements.

This might make some interesting weekend reading. Or not. Some of the stuff on FX interventions is of interest right now, looking at you Bank of Japan!

Monetary policy in the 21st century: lessons learned and challenges ahead

Key takeaways

• Since the turn of the 21st century, a series of extraordinary events – major financial crises, a pandemic and an unexpected surge in inflation – have profoundly shaped the conduct of monetary policy.
  
• This tumultuous experience points to several lessons regarding what monetary policy can and cannot deliver. They concern the ability to control runaway inflation, the power to stabilise the financial system at times of crises, the limits to forceful and prolonged monetary easing, the growing complexity of communication, and the complementary role of foreign exchange (FX) intervention and macroprudential policies.
  
• The lessons point to a number of key considerations that could guide monetary policy in the years ahead. These stress the importance of robustness, realism in ambition, safety margins and nimbleness. Coherence across policy domains is essential to ensure the lasting achievement of macroeconomic and financial stability.

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Speaking of USD/JPY.

I’ve been away for a week. What’s the latest Numberwang guesses on the ‘line in the sand’ for the BOJ now for USD/JPY?