An exchange traded fund pegged to the Japanese yen’s movements relative to the U.S. dollar was set to rise on Wednesday as it recovers the loss it suffered after Japan’s central bank intervened in currency markets.

The yen was strengthening against the dollar Wednesday morning.

The Japanese yen intervention was too limited, according to Moody’s. The effects of the central bank forcing down the yen “were partially reversed the next day, a credit negative for Japan’s fragile recovery,” Moody’s senior vice president Tom Byrne said in a report. [Japanese Yen ETF Creeping Higher After Intervention.]

CurrencyShares Japanese Yen Trust (NYSEArca: FXY) gained about 1% on Tuesday after the Federal Reserve pledged to keep interest rates low until at least mid-2013.

Last week, Japanese finance officials took steps to ease the yen’s surge against the dollar. The nation’s export-driven market is in danger if the currency appreciates too high, reports The Mainichi Daily News. [Japanese Yen ETFs Rise to Record Amid Intervention Talk.]

“Yen strength has eroded the competitiveness of Japan’s exports, and hampered the economy’s ability to sustain its recovery from the 2009 recession,” Byrne said, adding, ” without robust export performance, the strength of the post-earthquake recovery will be jeopardized.” [Yen, Swiss Franc Rally After S&P Downgrade.]

CurrencyShares Japanese Yen Trust

Read the disclaimer; Tom Lydon is a board member of Rydex|SGI.

Tisha Guerrero contributed to this article.

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