With the yen consistently dominating other major currencies, I don't think there is doubt anybody's mind that that Japan's verbal and currency intervention moves have failed.
A look at charts will show that USD/JPY is currently trading very near its all-time low despite the amount of effort Japan has given to stem the rise of their currency.
If I recall correctly, on August 4, the Japanese government used up over 60 billion USD just to prevent the yen from appreciating. For a moment, it seemed to work, but a few days after, the yen resumed its rally and hit a new high versus the dollar.
In response to their own failed attempts, the Japanese government decided to take action again. This time, however, they went with a different route.
Two days ago, they revealed a 100 billion USD credit facility for Japanese businesses to curb the yen's appreciation. The 100 billion USD facility aims to take advantage of the yen strength by buying goods and services.
In addition to the credit facility, Japan also indicated that they will monitor the currency trading of the 30 biggest financial institutions.
By providing Japanese companies access to more funds, they would use the yen's strength to their advantage by making it cheaper for them to acquire more assets abroad. Consequently, this will mean that money would flow out of Japan and out of the yen, providing downward pressure on the currency.
It's quite ingenious when you think about it! Japan is actually using their problem to their advantage!
While policymakers acknowledge that the impact may not be explosive immediately, it would at least make the yen's rise steady and consistent. It seems to me that the government is also encouraging exporters to be proactive in dealing with the yen's strength, instead of just relying on currency interventions.
One consequence of the new moves is that they may be taken as a sign by traders that direct intervention from the Bank of Japan (BOJ) won't happen in the near future. This could mean that we may actually see some yen strength in the short-term.
Don't get too excited buying the yen though. At the end of the day, know that Finance Minister Yoshihiko Noda said that they have not completely ruled out the option of currency intervention.