BOJ Intervenes For Second Time In A Week, Fails

Tyler Durden's picture

The half-life of central bank interventions is getting shorter and shorter. After Shirakawa decided to show the Fed who is boss, only to be met with the biggest beatdown the dollar has experienced since March, tonight the BOJ decided to show Bernanke how it's done. Too bad the idiots at the BOJ have learned nothing from the SNB's Hildebrand, who was last seen cowering in a fetal positions, underneath his desk. After surging by 100 pips post the second intervention in a row, the "wolfpack" is back, and the yen has retraced more than half it losses in under 2 hours. This pathetic attempt to weaken its currency has just cost the BOJ another few trillions yen, while the end result is the same: a Japan whose export economy is about to be crushed, and a central bank president who will now be forced to join the ranks of the unemployed within a month.

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MrTrader's picture

Long JPY. China is happily buying into every dip JGB´s. Long live China and their currency reserves.

bigdad06's picture

Wow! Shirakawa isn't to bright is he?

Hephasteus's picture

Well gee. The UN nations speeches were all a bunch of horseshit. I'm sure everyone left there pissed as hell.


Nigaz's picture

Sayonara Shirakawa!  (this will happen soon)

Victorio's picture

Central Banker=Impotent Ass Hat

this truth knows no borders...

MarketTruth's picture

Where is BHO or Geithner yelling at Japan for currency manipulation like they do with China? Or the Swiss who have manipulated their currency? Or how about lambasting Bernanke for manipulating the USD value and US debit interest rates? It is time the US treasury charges the Federal Reserve with a tax of a small 0.5% tax on their International transactions, as trillions have gone to foreign banks for the profit of the Federal Reserve yet the US citizens only stand to LOSE from this. It is time the Federal Reserve pays their taxes too!

Miles Kendig's picture

Can't stop a black blizzard with a bucket of water.

MarketTruth's picture

Another Analogy:

The Japanese are peeing while standing downwind.

Miles Kendig's picture

through the patio door... with golf shoes on

TraderTimm's picture

Man, I was wondering what the 100+ spike in the Nikkei was. Thought someone had a melt-up algo go wild. Hell, it is almost the same thing I guess. Didn't last long either.

Guess it is going to be a sad-face opening for U.S. Equities tomorrow. (If you are on the wrong side, that is.)


saulysw's picture

Con someone explain, in simple terms, where all that money went?

TheGreatPonzi's picture

In the pockets of banks, funds and individual traders.

anvILL's picture

and Japanese manufacturing firms that hedged currency risks in this opportunity.

Dismal Scientist's picture

To offset losses in other pointless capital market endeavours ?

Hephasteus's picture

The world want's to go green. It's going to be a bunch of work. So everybody has to lose their jobs so they can get the labor cheaper.

Artful_Dodger's picture

See news about the release of Chinese boat captain.

fresbee's picture

Once again Zero hedge speculates and speculates endlessly. If you check out MoF, there is still no confirmation. And an intervention will yield a lot more than 50 bps. 


So once again requesting you to verify facts before pulling the plug!!! 

Nigaz's picture

By the way, it was closer to 100 bps.  And regardless of the source, we are all grateful that this was a reminder about gold - pushed it to new highs now (and silver past the '08 peak).

fresbee's picture

fine. 100 bps. That is intervention? It may be but BoJ does not intervene w/o confirming.


Gold technicals look strong for the time being but the entire PM package is ignoring the fact that there is one currency that is not in a race to bottom and when it does realise, Gold will crash. For the time being though technicals in Gold are strong and stochastics still not showing any signs of a slow down. 



PhattyBuoy's picture

88 bps. Must have been the PBoC ...

fresbee's picture

that is a real possibility.

TheGreatPonzi's picture

Most central banks interventions are not publicly announced, or many days after, when no one's looking.

fresbee's picture

Not BoJ.

And one more myth that is evident around zerohedge is Swiss guys shaking in fear. You guys are absolutely funny when it comes to analysis. Swiss guys do not intervene for their own sake. They are an extended arm of ECB. The only reason why they intervene last time was to stabilise EURO. So they bought EURO and sold CHFs. This time around they are not worried as EURO is now well on its way ascendancy to where it belongs not withstanding the little debt problem of the PIIGS. So CHF guys will not intervene and nor are they worried. They may only if EURO weakens below 1.24 to the dollar. 


You guys speculate to the point of madness.

PhattyBuoy's picture

... the Swiss Franc is mostly considered as the 'safe-haven' currency, partly because the Swiss National Bank keeps a large part of its reserves in gold. When gold price appreciates and/or during geopolitical challenges the swissie usually rises as investors look to safer grounds.

fresbee's picture

lot more than safe haven that is aiding CHF. swiss and japan are both recovering fast and sustanably. While investing community is being fed about Japan double dip and deflation, the economy is recovering faster than ever before. Swiss was always strong. 



PhattyBuoy's picture

Dreamer you're nothing but a dreamer.

Well can you put your hands in your head - oh No !

fresbee's picture

ur name fits ur style. too phat for ur own head. 

ZeroPower's picture

This time around they are not worried as EURO is now well on its way ascendancy to where it belongs not withstanding the little debt problem of the PIIGS.

Yup, definitely just a LITTLE debt problem when 1/5 of your direct partners are experiencing such troubles which will force the strong countries hands in a matter of years.

Happy those bond auctions went off fine? Thats great...except a few years down the line they wont be able to pay the interest on the debt owed. What then? Germany to the rescue? No too selfish. Someone in East EU? Nope!  

The EURs best possible range from an economic standpoint is 1/2 the GBP and about 3/4 the USD.

fresbee's picture

guess thats what Ambrose Evans said: PIIGS will revolt against budget cuts. They did. But in the end. Budget cuts are being stringently implemented. And my bet is that the PIIGS will payback as opposed to the US which will never never payback. 

And you forget the role of China. They are here to stay and trade with PIIGS. Infact 1% of EURO bulls have nice saying: "China will trade away PIIGS debt problems."


Wait till the time when ECB raises its rates as inflation will bite and only then will folks like you will understand that EURO is a far more resillient currency than u think it is. 


March 2011 is my bet for ECB 25 bps hike and EURO/USD to 1.7 atleast. EUR/GBP=1.1 atleast. Infact Against GBP it can be more like 1.3 or 1.4 also. 




ZeroPower's picture

It is strange how you are so confident your European friends will indeed 'payback' but you are equally sure the USA never will. While i agree the States are in a dire state, the PIIGS are not better off - if anything, they are worse off since their fiscal policies are all intertwined.

How can you possibly think a country like Greece or Spain (20% unemployment, officially!) can service its future debt.

As for the role of China, complete disagree that China will help the EUR. Yes, China wants to keep trading with many EU nations, and it will. But whats favorable for the Chinese, a strong or a weak EUR. Ponder those questions for a minute, maybe do some research, and then perhaps you can change your biased viewpoint. EURGBP of 1.3 or higher has absolutely no merit - its never been higher than .95, and while history isnt necessarily the best indicator of future performance, you can agree the Brits will not be threatened by their neighbors, hence why they still have their precious pound.

PhattyBuoy's picture

Fiatsco(s) race to the bottom & beggar thy neighbor gathers momentum.

PMs juiced on paper volatility ... Gold $1297.00 Silver $21.33

EscapeKey's picture

Gold is seriously flirting with $1,300 now, like a middle aged divorcee after a bottle of wine... C'mon, you god damned tease, deliver!

Ooh, and she did!

-1Delta's picture

ES/GC 0.865 ... give it a week and i think the ratio breaks south in a big way

Young's picture

It's gonna be funny as hell when they fail every intervention until the dollar eventually rises by itself...

jmc8888's picture

That's gotta hurt.  Maybe someone should translate the law of diminishing returns and send it to them.

Of course this won't be the last central bank to throw money into the fire.

With this sort of bloodbath (japanese restaurant scene), someone better look for Beatrix Kiddo and her Hattori Hanzo.  I think she was entombed for longer than value of the intervention held up.

Sliced in half as quick as a Hanzo.

Nigaz's picture

Is Goldman out with another note saying sell the EUR to 1.27?  (watching it spike to 1.34 tonight)

monkeyfaction's picture

The BOJ have already said they aren't going to sterilize their yen sales.
Print Yen. Sell Yen. Repeat.
I'm not sure how that can fail so long as they do it enough?

Sudden Debt's picture

The chinese are buying it all, and whenever they think they have enough to destroy the japanese economy, they'll just dump it for 1cent on the dollar.

I might cost a few 10's of billion of $ but it's cheaper then a war an much more effective in destroying the japanese spirit and economy. And that's where it's all about in war.

Japan should start to send out people to the chinese who can really kiss ass before it's to late.


three chord sloth's picture

Thank you.

I don't know why the author is assuming it's the FED propping up the Yen; the Chinese are a much more likely culprit.

Midasfinancas's picture

Now these mother fuckers are intervening on Euro or whatever fuck their acting because eur_usd just went to the moon... fuck this bitchs and fuck central bankers...

fresbee's picture

Physical Gold is the dumbest idea I have ever heard in all my life and I work for $35bn hedge fund. 15-20% holding cost, taxes and other charges as and when you try to monetise. 


The argument for Physical Gold is that the world will end and hence you will be able to buy food with Gold. Imagine how dumb that idea is for a minute. Physical Gold is suggested by the absolute losers in the investing world. Men who cant find trends and patterns and cant make absolute returns. 


You might as well buy some coal mines and cattle and lakes(water) for such times. May just give better returns that Gold. 


Gold is best traded thru futures and try catching the trends and patterns. Right now it has broken its channel at 1263 and closed above 1263 for 3 days continous which meant it was going well over 1300. Physical guys whld discount the holding cost from that Gold profit return. 


PhattyBuoy's picture

JohnnyJizz - is that you?!

tmosley's picture

Enjoy your exponentially increasing counterparty risk and failed business model, moron.

You know NOTHING of gold, if you think it has a 20% carrying cost.  Spreads are generally less than 3% on physical at reputable dealers.  Unless you are buying a safe for every two oz of gold, your carrying costs should be about 3%.