Eyes are on the yen on a big move lower in USD/JPY ahead of the weekend. The pair is down 202 pips on the day now to 156.40, which is a sharp reversal after rising to 159.22 when the Bank of Japan left rates on hold.
USDJPY 10 minutes
There is some chatter that’s unconfirmed that Japan’s Ministry of Finance (which controls FX intervention) ran a rate check. That’s where they call around to banks and ask for current yen prices.
That kind of move is a bit of theater but it’s a signal to everyone that they’re closely watching the market, and prepared to get involved. It’s often the final step before actually intervening. Again, sometimes these rumors follow price action so it’s tough to tell.
As for actual intervention, that’s not what this looks like to me. Generally, they hit much harder and swifter. This looks more like stops and strong, steady USD/JPY selling.
Notably, this is coming with the US dollar under some serious pressure across the board. Further to that, oil prices are strong today in a curious move. I hate to do too much speculation but Trump has been making some weekend moves and the market could still be thinking about what happened in Venezuela. The obvious inference is that something could happen in Iran, which would be both USD negative and oil positive (throw in some precious metals bullishness too).
Other than the usual corners of the internet that are constantly talking about US military strikes, I don’t see anything along those lines. Then again, there was a bit of smoke around Venezuela but not real fire.
So all this to say that it’s not really clear what’s behind the precious metals buying, dollar selling and oil bids today.
