In the past two years, the US Dollar Index has declined about 26%. However, by looking at the dollar's performance in terms of the basket of currencies comprising the index, it is easy to overlook the dollar's performance against each individual currency. For example, during the past two years the dollar has declined 29% against the euro, 27% against the British pound, but only 17% against the Japanese yen. This conspicuous underperformance of the yen can be explained by market interventions by the Bank of Japan. Its aim has been to limit the yen's strength against the dollar to protect...