Multiple interventions by the Bank of Japan have failed and now the Fed is supposedly going to step in to save the yen in order to keep Treasury yields from taking off. https://buff.ly/3UW11fc
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BOJ initiates unscheduled bond purchase to stabilize rates. The Bank of Japan is offering to buy ¥300 billion in JGBs commencing 2 October. Japanese yields have been progressively increasing this week, reaching 0.77% for 10-year JGBs today. Following the BOJ's decision to let yields exceed 0.50%, bond selling has been persistent. It appears policymakers aim to moderate the pace, preventing a swift approach to the 1.00% threshold.
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Financial markets professional. Derivatives trader, training consultant and lecturer at banks, hedge funds, financial service firms and universities.
On Tuesday, USDJPY took a sharp fall in what was widely considered to be BoJ intervention to slow the fall in the yen. https://lnkd.in/eP_zzFAd Then on Wednesday, the BoJ openly intervened in the JGB market to buy the belly and slow the rise in yields. https://lnkd.in/ebzENqCs USDJPY has been going higher in recent months with the increase in the yield differential between Treasuries and JGBs, a move that has clearly gone too far, too fast, for the BoJ's comfort. But, by buying JGBs in larger than expected size, they will be increasing that yield differential. On Tuesday they are taking action to push USDJPY down and then on Wednesday taking action that pushes it up. This lack of clarity from the central bank is unsettling for the markets at best, and at worst makes it look like there is confusion and inconsistency inside the BoJ. Uncertainty breeds volatility. It will be interesting to watch the vols in USDJPY, JGBs, and Japanese swaptions over the coming days.
Yen rebounds from ¥150 to dollar as Japan mum on intervention
japantimes.co.jp
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🇯🇵 #Yen Hit 34-Year Low against USD, Japanese Government Holds Three-Party Emergency Meeting (MoF, BoJ, FSA). Key Points from Post-Meeting Press Conference: ✔️ Officials closely watching market moves, open to taking all possible steps against excessive market moves ✔️ MoF noted JPY depreciation clearly driven by speculative moves, and speculation won’t be tolerated ✔️ BoJ noted central bank won’t comment on FX rates, but will monitor effects of exchange rates on the economy and consider monetary policy adjustments as needed Though no direct FX interventions yet, this is the Japanese government sending clear verbal intervention signals. USD/JPY dropped -0.2% post meeting. 📊 JPY fundamentals vs. JPY/USD: https://lnkd.in/gVzV8s2F 📊 JPY verbal intervention search trend index: https://lnkd.in/gRpS5wWZ 🧰 Customize the charts: https://lnkd.in/gK6k-iwe https://lnkd.in/gVCfDXYg #MM #JPY #forex
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The Japanese Yen has come back above 160 per dollar (white line). After two interventions where the Minister of Finance supposedly spent $55Bn to defend the currency rapid depreciation vs the USD, it seems its weakening is unstoppable. On top of that, the 10 yr JGB (red line) is also falling in price (up in yield), after Yied Curve Control policy failed, and the yield more than doubled YTD. But whats interesting about the chart below is the blue line, which represents the yield difference between the 10 year US treasury bond and the 10 year JGB. Notice that until the first intervention, the three lines where moving in sync. After interventions, the U.S. treasury yield decoupled, and stopped going up, which perhaps indicate that whatever link existed between both central banks and Institutional investors, has disappeared. Is that an indication that this has become a predominantly domestic affair? Why aren’t arbitragers putting money behind a more attractive Japanese yield? Want to know more? join Fund@mental here https://lnkd.in/ewBZ9GK4 #iamfundamental #soyfundamental #wealthmanagement #familyoffice #financialadvisor #financialplanning #policymistake #ratecut #stagflation
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The yen rose across the board on Tuesday, sending USD/JPY below 155 as investors trimmed stretched risk positions in higher-yielding currencies with stocks and oil prices falling following weaker-than-expected US data. Meantime, Bank of Japan President Ueda stated that while the BOJ allows market forces to determine long-term interest rates, they are ready to intervene. He reiterated that the BOJ would adjust its policy according to inflation and the economic outlook. Last week, Bank of Japan board member Seiji Adachi said that the central bank may raise interest rates if sharp falls in the yen lead to further inflation. #usdjpy #boj #forex #tradingtips #forexanalysis
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Following the surprise Christmas twist from the Fed, the major news this week is that the Bank of Japan has opted to keep investors in the dark about when it will end the last negative interest rate. Ueda looked intent to leave his options open during a press conference following the central bank's two-day meeting. The growing possibility of the Federal Reserve swinging towards rate reduction in the United States looks to be narrowing the window for the BOJ to hike rates for the first time since 2007. This has offered another lift to the USD/JPY FX rate for the time being, but the pair below 145 plainly demonstrates that investors are on the lookout for what the BOJ will do next, and everyone will be monitoring the Japan November CPI, which will be issued this Friday. #finance #investment
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Things That Stick Out: BOJ Edition Minutes of the Bank of Japan's April meeting released early Thursday were surprisingly hawkish, sending front-end JGB yields to fresh cycle highs as members appeared to worry about the inflationary impact of the downward spiral in its currency. The lead quote from the 'major opinions' of the meeting says, in part, that 'there is a good possibility that the pace of (monetary policy) normalization will accelerate,' with one member remarking 'the interest rate path may be higher than what the market is factoring in.' The message was lost on the FX crowd, who have been burned repeatedly by similar sentiments in the past. Nevertheless, the underlying rate differential between Japan and the US is making a move here and bears watching. (See chart) But since the price action in JPY remains dismally poor, take this as more of a cautionary signal for a possible reversal than an inducement to catch a falling knife. See original IGM post here: https://lnkd.in/e-PMJ6ph IGM | Informa Connect #inflation #interestrates #japan #boj #jgb #jpy #foreignexchange
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Even after the Bank of Japan’s July tweak to yield curve control, the yen failed to stage a follow-through rally. We believe much of the yen’s underperformance is due to the meteoric rise in US interest rates, which have overshadowed the BOJ’s maneuvers. US moves have been influencing the exchange rate and preventing the yen from appreciating. We believe this situation is similar to what is happening with other low-yielding Asian currencies and the euro to some extent: https://bit.ly/3ZIvjmD
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When will the Bank of Japan put one of the world’s most ambitious monetary easing programs to an end? And when it does, will that hurt US Treasuries? Read the latest MLIV Pulse to find out. https://bloom.bg/3McYHvu
When Japan Ends Negative Rate Policy, Treasuries Will Suffer
bloomberg.com
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While core inflation in Japan slowed for a second consecutive month, another indicator closely watched by Bank of Japan (BoJ) officials suggests rising prices are yet to continue. Based on the consumer price data, the BoJ releases notable insights regarding the distribution of inflation data. #forexbuzz #buzz #latestbuzz #latestforexbuzz #usd #jpy #eur #currencynews #latestforexnews #forexmarketupdates #forexupdates #news #latestnews #forexnews #news #trading #forextrading #brokerage #forexbrokerage #cfdbroker #cryptobroker #cfdbrokerage #cryptobrokerage #forexbroker #brokers #broker #financialfreedom #forexmarket #forexlife #PheasanTechsolution
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