Japan continued to conduct "stealth" interventions in the currency market after its highly publicized yen-selling campaign on Oct. 31, data released by the Finance Ministry confirmed Tuesday.
In a sign of the government's determination to tackle the strong yen, the data, which provide a daily breakdown of MOF's currency intervention in the last quarter of 2011, showed that the ministry covertly bought dollars for yen from Nov. 1 through Nov. 4.
An official said that the government decided on the stealth intervention as the most effective way to push down the value of the yen.
"We made a judgment that [stealth intervention] was the most effective way," to counter the yen's rise around that time, the official said. The massive intervention pushed the dollar up.
The intervention took place Nov. 3, a national holiday in Japan, when the Tokyo market was closed, sharply reducing overall dollar-yen trading volume in Asia. The action came a day before the U.S. released its closely watched employment report, data that often affect the dollar-yen exchange rate.
The Finance Ministry declined to say at what time that day's intervention took place. The ministry sold ¥8.072 trillion ($105.4 billion) on Oct. 31, its biggest ever single-day intervention, and ¥1.019 trillion in the four days afterward, the data showed.
The Oct. 31 intervention pushed the dollar up as much as 5% to ¥79.55, from around ¥75.65 just before the MOF entered the market. By the end of Nov. 4, it was at around ¥78.22.
The covert intervention was the first since 2003-2004, when the ministry launched a massive yen-selling intervention to prevent the economy from falling back into deflation.
The MOF's disclosure was roughly in line with market expectations that the ministry was covertly active in the market for around a week after the full-scale intervention on Oct. 31, which was publicly announced by Finance Minister Jun Azumi.
As the ministry tries to rein in a stubbornly strong yen that is damaging the economy, a shift in its foreign-exchange tactics toward stealth intervention makes it more difficult for investors to predict its actions and forecast the direction of the dollar-yen exchange rate.
The change of tactics is a marked departure from the three previous one-day interventions by Japan since September 2010.
The government official declined to comment on whether Japan notified U.S. financial authorities of its plan to conduct stealth intervention at that time.
Japan's intervention has brought criticism from other G-7 countries.
The U.S. Treasury made it clear in a semiannual report on foreign exchange released in late December that the U.S. didn't back the interventions in August and October.
"The United States did not support" the two large-scale interventions, the report said, adding that Japan should instead "take fundamental and thoroughgoing steps to increase the dynamism of the domestic economy."
The report caught traders off guard, leading them to believe that it would be more difficult for Japan to conduct another intervention.
Mr. Azumi said Tuesday that he will make his own decisions on when to intervene in the currency market.
"I will do it based on my thinking and my stance," he said in response to a question as to whether the U.S. will react to the stealth intervention.
The government is under strong domestic pressure to act as companies continue to announce plans to move jobs offshore.
Citibank Japan chief currency strategist Osamu Takashima said that while the U.S. pressure makes Japan's position more precarious, "I don't believe the MOF has ruled out anything."
The Oct. 31 intervention came after the yen strengthened to a post-World War II record of ¥75.31 to the dollar in early Asian trading that day.
Late Tuesday in Tokyo the dollar was at ¥76.65.
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