It may have been a victory lap of sorts. One day after the ruling Democratic Party of Japan leadership contest was resolved in prime minister Naoto Kan’s favour, the Japanese government intervened in the currency market to weaken the yen. While the move is a welcome escape from Tokyo’s policy paralysis, its significance is more political than economic.

Instructing the Bank of Japan to sell off yen will have flattered supporters of Ichiro Ozawa, Mr Kan’s defeated challenger, who argued strongly for intervention in the leadership contest. More importantly for the DPJ, it may bolster the party’s popularity, which has withered after its election landslide a year ago. The steady rise of the yen against the dollar – which broke through a 15-year high of Y83 to the dollar on Tuesday – has unsettled exporters.

Company owners seem to think knocking down the yen – by three per cent during the course of Wednesday – will help them: they sent Japanese stock prices up by 2.4 per cent. But any succour will surely be short-lived.