File it under the things they wish you would never find out. On March 25, 2003, two years into what was supposed to be a temporary intervention, the Bank of Japan gathered for another policy meeting to discuss what they might do. They had launched the world’s first ZIRP in February 1999, ended it August 2000 with a “rate hike”, and then on March 19, 2001, embarrassingly reversed course. This time it would be the world’s first QE.

By March 2003, it was clear it wasn’t working. Japanese central bankers discussed ways in which they might go further. BoJ’s Deputy Governor at the time, Kazumasa Iwata, wanted the Bank to introduce an explicit inflation target. It would commit the central bank to unlimited “easing” for as long as it took, satisfying the criticism from some mainstream Economists.

He was opposed by Governor Toshihiko Fukui who had just ascended to the top post.

While Fukui was “sympathetic” to the idea, he said, “I have a basic doubt that we cannot control expectations.” Rough translation aside, Fukui would know best about monetary policy not working as designed from being measured in academic models.

But the Japanese had already gone with something else. Beginning January 2003, the Bank of Japan started intervening more heavily in foreign exchange; only it wasn’t really the BoJ or at least its policy behind the transactions. The Bank was acting at the behest of the Ministry of Finance (MoF), as it was required to do. The latter decided on yen policy using the former to carry it out.

When BoJ officials reconvened in June 2003, on the 10th and 11th of that month, the minutes record two important developments.

In the foreign exchange market, the yen depreciated as market participants became sensitive to a possible market intervention and as some U.S. economic indicators improved. The yen is currently traded in the range of 117-119 yen to the U.S. dollar.

MoF had not acknowledged its entry into yen manipulation, but the markets by June had already suspected that’s what was going on. By that time, they didn’t really need official confirmation because it was pretty clear they were in there to a considerable degree and in a sustained fashion.