Possible BOJ intervention on USDJPY right now ?

[TrAndy2022]

So go short USDJPY until at least 141/140 area ? It looks like to me that Bank of Japan is right now intervening, or what do you think or have heard ? The move is very unusual on the chart, if you see the steady 5min candles here.

https://www.bnnbloomberg.ca/mr-yen-says-japan-s-currency-may-weaken-to-160-and-beyond-1.1942456

Update: Obviously no intervening today it seems. It stopped selling right after Asian close.

 

[maxinger]

You already missed the boat.

Anyway, for the past few years, BOJ's decision hardly move jpy.
FED is different; FED can shake the earth.

 

[engineering]

Anyway, for the past few years, BOJ's decision hardly move jpy.

This raises an interesting question (at least to me), "What does control the exchange rate?"

I'm guessing that it is set by export pricing (cost of 100 Honda Accords and 100 Toyota Tacomas) but I haven't spent much time thinking about it.

I know if I had a wheelbarrow full of JPY on my hands, I'd be trying to convert it to trade goods ASAP. I'd have no interest in Japanese stocks or real estate.

 

[M.W.]

Then you are probably missing out on one of the markets that may outperform most other markets within the next 5 or 10 years.

This raises an interesting question (at least to me), "What does control the exchange rate?"

I'm guessing that it is set by export pricing (cost of 100 Honda Accords and 100 Toyota Tacomas) but I haven't spent much time thinking about it.

I know if I had a wheelbarrow full of JPY on my hands, I'd be trying to convert it to trade goods ASAP. I'd have no interest in Japanese stocks or real estate.

 

[engineering]

Then you are probably missing out on one of the markets that may outperform most other markets within the next 5 or 10 years.

Based on what specifically?

Is this just wishful thinking, or do you have some specific analysis that shows Japan is well on their way to fixing their various problems? (Serious question)

https://research.stlouisfed.org/pub...07/15/the-asset-holdings-of-the-bank-of-japan

https://www.bloomberg.com/news/arti...gest-japan-stock-owner-with-434-billion-hoard

IMO:
1) Japan has a serious problem with the size of their central bank balance.
2) Japan has managed to break their own bond market.
3) Japan might very well manage to break their own stock market.

I like Japan. I'd love to go back to Japan and enjoy the place for a while, but I'd hate to have my money tied up there.

 

[taojaxx]

MoF is the one intervening, not BoJ. You can find their monthly release here:
https://www.mof.go.jp/english/policy/international_policy/reference/feio/index.html
Last intervention was September-October 2022 selling $ around 145. Down to 142 on Friday, I don't think they'd intervene below 145.
I agree that long Nikkei is a great trade as large investment flows are being redirected to Japan. That makes short $/yen unappealing as you have to cough up the swap points waiting for MoF to intervene, which they may never do since a stronger currency is a tightening factor, last thing they need. They may be content drifting up to 150-155, as long as it happens in an orderly way.

 

[engineering]

MoF is the one intervening, not BoJ.

You're missing the forest for the trees. The BOJ balance sheet and holdings create a major risk to the japanese economy and the value of their currency.

I'm not interested in tiny forex interventions. I'm worried about the BOJ owning roughly half of outstanding bonds and starting to become a major stock owner as well.

It's like debating the quality of landscaping of a house with a gaping hole in the roof.

If things were looking rosy for the japanese economy, they wouldn't have to have to BOJ buy up all the debt.

 

[taojaxx]

Funny funny. "I'm not interested in tiny forex interventions".
Tons of folks long $/yen (most Hedgies) to fund investments globally saving 4% a year on funding compared to borrowing US$ ARE definitely interested in not losing in half a day a years saving on funding costs.