In an apparent example of peak hypocrisy, a Eurozone official told Reuters today that "Forex intervention by Japanese authorities would not be welcome in Europe." Of course, when it was the Swiss National Bank and the BoE (confirmed) intervening, and the ECB (alleged) doing all they can to lower the value of their currencies it is all good, and Europe doesn't care that the JPY will appreciate. However, when others do the same, it's "not welcome." At least the Eurozone hypocrites qualified their statement by saying: "I doubt any sort of coordinated intervention will ever fly" - we will be sure to remind Hildebrand and Trichet of this, the next time they are trying to kill their respective currencies.
The official is familiar with euro zone official thinking on the issue, but is not a central banker and not among those who would decide directly on any intervention.
The yen hit 15-year highs versus the dollar on Wednesday, and speculation is rising that Japan could intervene on currency markets to stem the rise.
Japan's authorities haven't intervened since March 2004, when they ended a 15-month-long yen selling spree.
"Yen appreciation over the last month and a half versus the dollar has been too rapid," the official said.
"Although partly a reflection of changes in growth outlook in the U.S. and the normalisation of the debt situation in Europe, it could threaten ongoing recovery in Europe."
Whether this appreciation is excessive is a matter for the Japanese authorities to judge, and if necessary intervene, the official said.
Nonetheless, "European policymakers wouldn't do anything about it and would not welcome any move by others."
European officials may fear that intervention to curb yen strength could lead to a rise in the euro which would penalise euro zone exports.
The European Central Bank often warns about the risks of currency volatility but has not intervened on markets since 2000, when it acted to stem euro depreciation.
In a world in which war is fought with ones and zeros on the global marketplace, Europe has just issued it official warning to Japan (and implicitly to the US) to not do as it itself has done... or else.