The yen is trading within range of its pre-crisis levels against the dollar just hours after G-7 countries intervened in the markets.
Will this last?
Let's look at the history books.
Rebecca Patterson , global head of currencies and commodities for J.P. Morgan's private bank and a contributor on CNBC's "Money in Motion Currency Trading," looked at past interventions for clues, and she is bullish on this one.
"First, intervention has worked better when it was coordinated rather than undertaken by just one central bank," she told me.
"Second, intervention has been more successful when backed up by similarly biased policy. The massive intervention we had today meets both criteria." Patterson expects intervention to remain "a high-probability risk" until the yen's volatility returns close to pre-quake levels, around 9% versus today's roughly 14%.
Coordinated interventions can even act as game-changers, according to Derek Halpenny, European head of global currency research at Bank of Tokyo-Mitsubishi. In 2000, coordinated action on the euro had a sustained effect, he wrote, as did coordinated efforts on the yen in 1995 and 1998. In contrast, unilateral moves by Japan earlier in 1998 and in 2010 brought only short-term change. "T his coordinated action is likely to follow the familiar historic pattern of marking a key turning point in the trend of the yen," he wrote.
Over at Brown Brothers Harriman, however, Marc Chandler,global head of currency strategy, called the potential for lasting impact "minimal at best."
But Chandler believes the G-7 actedfor macro reasons, rather than purely a desire to help the Japanese, and in that sense, he told me, the move was a success. "What got theG-7 to intervene was the question of systemic risk," he said. "The yen strength had the potential to destabilize the global markets. They got what they wanted. It's not so much the yen-dollar going up or down, but stabilizing, and the global equity markets stabilized."
So who is right? We'll know in a week. Or two. Or three...
Tune In: CNBC's " Money in Motion Currency Trading " airs on Fridays at 5:30pm.
"Money in Motion Currency Trading" repeats on Saturdays at 7pm.