Central banks need to clarify FX intervention

"The benefits [of transparency] appear to outweigh risks in enhancing the transparency of the objectives and the actual operations," said Chiu. But: "In terms of intervention tactics, there seems to be strong justification for retaining a degree of constructive ambiguity, especially for floating exchange rate regimes."

Chiu said Japan’s recent history highlighted a number of problems associated with central banks’ intervention. Compared to other countries with a floating exchange rate, Japan