Doctors of spin leave media in a trance
It isn't every day a newspaper leads its front page with a story knocking down two reports it never ran. But there was China Daily on Thursday giving six columns across the top of page one to a denial of a story from Reuters news agency and a clarification issued by a Hong Kong newspaper.
The two stories both concerned the possibility of a policy switch by China to consider devaluation because of the effect of the fall of the yen.
By the time China Daily appeared, the stories had been overtaken by the intervention by Washington and Tokyo to buck up the Japanese currency. That intervention came a few hours after the most important of the two stories that were denied - a Reuters despatch which said it was reporting remarks by Vice-Foreign Trade Minister Sun Zhenyu.
At times like this, nouns and verbs count. The markets can be powerfully moved by a few words from somebody presumed to be in the know - and by the interpretation put on them.
When the British Government was fighting to keep the pound sterling in the European Exchange Rate Mechanism, a few less than clear remarks from the head of the German Central Bank started a run which forced London to jack up interest rates, and then admit defeat and let sterling float.
With the yen crashing towards 150 to the US dollar in the middle of last week, the atmosphere was just about as febrile. At this newspaper, we tried to make out what the Reuters report could mean.
Was the vice-minister simply reflecting the effect which a continuing decline of the yen would have on Chinese exports. Or was he hinting at a change of policy? Or was it a warning to Tokyo - and Washington - that if nothing was done to stem the fall in the yen, Beijing was ready to do the unthinkable and devalue.
And so should we see the words on the screen as a straight statement, or as part of a deeper strategy? We decided to run the Reuters story straight and clearly sourced.
But within a couple of hours that night, Mr Sun's remarks were overtaken by news of the US-Japanese intervention which led the paper. The next day came the denial and a statement from the Governor of the People's Bank of China, Dai Xianglong , repeating the commitment to hold the yuan stable against the US dollar.
This sequence of events - and other remarks made during the week - underline the way in which a few words can place the media in a situation they cannot evaluate. Today, are we to believe the US Treasury Secretary's doubts about the value of intervention expressed last week - or should we see last Wednesday as evidence that Washington believes in using its financial muscle to set the levels of other currencies? And what, may we ask, is the role of the media in this? Some would say we have a responsibility to avoid spreading panic - but where does such a responsibility end and the fundamental job of informing the public begin? Particularly when it is a moving game in which words may be part of a hidden strategy.
Prudence can rebound on those who urge it. One recalls the occasion the New York Times held back on news of the invasion of Cuba at the request of the Kennedy administration, in the interests of national security. In retrospect, President Kennedy was said to have regretted this since a leak might have forced him to abort the disastrous Bay of Pigs expedition.
Without seeing ourselves as entirely at the mercy of spin doctors, we have to recognise that the media will be used by those for whom a word here or a meaningful silence there can serve a useful purpose. If the yen-dollar-yuan triangle does not settle down, expect further flurries of statements and denials as reporters, officials and bankers surf the currency wave together.