Japan should leave the yen bazooka at home

ROBERT Rubin, the former US Treasury secretary who added American firepower to the successful defence of the yen in the late 1990s, had some rules for foreign-exchange intervention.

Such moves needed to be very rare and ought to be startling. The more surprise, the better, because a market whose value has swollen to US$7.5 trillion a day could easily swamp such action.

As a former Goldman Sachs chief, Rubin also appreciated that currencies ultimately reflect the underlying conditions of an economy, relative to peers. Japan would do well to remember that as it debates how, and when, to battle a surging greenback.