How they gonna intervene in the Yen?

[pinetboltz]

so in recent days the BoJ said they would intervene in the yen as it's becoming too weak, with all "options" on the table

& then JP morgan earlier today said USDJPY could trade up to 155 (up from their own target of 150 a couple weeks ago)

given the strong bullish trend for USDJPY, which makes it seem like everyone ex Japan is short the yen, how do you reckon they (BoJ) gonna intervene in the Yen?

to paraphrase elon musk, is the most entertainig scenario the most likely??

eg. a few scenarios that come to mind
a) they announce a "trading band/ ceiling" implied at the 150ish level, whereupon they do it like BoE around Black Wednesday vs the gaijin hedge funds, and maybe the new generation's Soros/Druckenmiller make billion dollar gains on breaking of the peg

b) they tolerate the onslaught in silence for a while, and just as the market lets down their guard, they do a swissy 2015 suddenly, blowing out all the stops in true ninja style

c) they ramp the yen like how the ES was ramped by PPT, in the shadows without explicitly taking credit

d) they don't actually do anything because they think it's going to look worse/ more embarrassing if they tried and still failed, the market realizes this and takes off, the yen trades to where it's going to trade to anyway

 

[maxinger]

Eur, Gbp, Aud, Cad, Swiss, and Jpy all behave in a similar pattern;
USD is strengthening.

BOJpy going to intervene?
How about BOEur, BOGdp, BOAud, BOCad, BOSwiss?
Are they going to intervene?

 

[M.W.]

This is stuff for short term traders. If you want to trade macro then you wait to let this play out, the yen is gonna weaken until BOJ readjust its entire monetary policy. 5% is just too juicy a return for Ms watanabe to pass up. I would love for USDJPY to trade above 150, once BOJ starts hiking, yen crosses would be a great short for many months to come.

so in recent days the BoJ said they would intervene in the yen as it's becoming too weak, with all "options" on the table

& then JP morgan earlier today said USDJPY could trade up to 155 (up from their own target of 150 a couple weeks ago)

given the strong bullish trend for USDJPY, which makes it seem like everyone ex Japan is short the yen, how do you reckon they (BoJ) gonna intervene in the Yen?

to paraphrase elon musk, is the most entertainig scenario the most likely??

eg. a few scenarios that come to mind
a) they announce a "trading band/ ceiling" implied at the 150ish level, whereupon they do it like BoE around Black Wednesday vs the gaijin hedge funds, and maybe the new generation's Soros/Druckenmiller make billion dollar gains on breaking of the peg

b) they tolerate the onslaught in silence for a while, and just as the market lets down their guard, they do a swissy 2015 suddenly, blowing out all the stops in true ninja style

c) they ramp the yen like how the ES was ramped by PPT, in the shadows without explicitly taking credit

d) they don't actually do anything because they think it's going to look worse/ more embarrassing if they tried and still failed, the market realizes this and takes off, the yen trades to where it's going to trade to anyway

 

[pinetboltz]

lol i guess we got our answer today

that smash was insane, even more impressive given it was past 11pm Tokyo time, so they must be working late

wonder how many trend following/ quant funds got caught, especially those with longer time horizons

 

[schizo]

so in recent days the BoJ said they would intervene in the yen as it's becoming too weak, with all "options" on the table

& then JP morgan earlier today said USDJPY could trade up to 155 (up from their own target of 150 a couple weeks ago)

given the strong bullish trend for USDJPY, which makes it seem like everyone ex Japan is short the yen, how do you reckon they (BoJ) gonna intervene in the Yen?

to paraphrase elon musk, is the most entertainig scenario the most likely??

eg. a few scenarios that come to mind
a) they announce a "trading band/ ceiling" implied at the 150ish level, whereupon they do it like BoE around Black Wednesday vs the gaijin hedge funds, and maybe the new generation's Soros/Druckenmiller make billion dollar gains on breaking of the peg

b) they tolerate the onslaught in silence for a while, and just as the market lets down their guard, they do a swissy 2015 suddenly, blowing out all the stops in true ninja style

c) they ramp the yen like how the ES was ramped by PPT, in the shadows without explicitly taking credit

d) they don't actually do anything because they think it's going to look worse/ more embarrassing if they tried and still failed, the market realizes this and takes off, the yen trades to where it's going to trade to anyway

Japan is the largest holder of the greenback. Should they decide to liquidate that holding in the open market (or even a slightest hint of doing so), it would send the Dollar into a tailspin.

 

[engineering]

BOJ basic loan rate is 0.3%.

It seems to me that if they are serious about avoiding a decline in currency value, interest rates have to normalize.

I'm not sure that will really happen soon. They seem to be interested in protecting exports at all costs, and the financial consequences for the average person be damned.

I wouldn't place any bets in any direction because it seems like the government has taken control over the whole situation to the point that they have broken their bond market.

 

[engineering]

Japan is the largest holder of the greenback. Should they decide to liquidate that holding in the open market (or even a slightest hint of doing so), it would send the Dollar into a tailspin.

View attachment 324405

I'm not so sure about that. Sure it would temporarily depress US treasuries, but that is not the same as the exchange rate.

It would certainly depend on what they do with the dollars they'd get for the bonds.

The BOJ holds over 40% of the Japanese government debt. if they did something stupid and used that money to just buy more Japanese government debt, the word might just laugh and devalue the yen instead. At that point the BOJ would own over 50% of Japanese government bonds.

The world might just say, "Wow Japan is in such a bad way that they had to liquidate their UST holdings so the could continue to fund the Japanese government."

 

[nitrene]

I guess that was the tremor at 1017EST on the DXY. What exactly did they do? BOJ doesn't seem interested in rate normalization so every time it hits 150+ I guess we will see this. Strange that after 34 years they are still doing extent & pretend.

 

[M.W.]

My hunch is that markets will push significantly beyond 150 before BOJ re-adjusts its policy.

This is stuff for short term traders. If you want to trade macro then you wait to let this play out, the yen is gonna weaken until BOJ readjust its entire monetary policy. 5% is just too juicy a return for Ms watanabe to pass up. I would love for USDJPY to trade above 150, once BOJ starts hiking, yen crosses would be a great short for many months to come.