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BOJ Intervention Picks Pockets Of Speculative Trend Chasers Everywhere As Yen Plunges, Futures Rip Higher
Insomniac market observers everywhere are watching with stunned horror at what is going on in Yen crosses, and thus futures markets. Per preliminary market rumors, the JPY is plunging following BOJ FX intervention, and picking the pockets clean of trend speculators everywhere. Unlike the SNB, which specs have grown to love and ridicule, as every €10 billion CHF intervention attempt is neutralized in the span of hours if not minutes, the BOJ is a far more reputable, and deadly opponent. And with implied cross-asset correlation at 1.000, and the only driver of all risk on or off being the YENXXX carry cross, the plunge in the Japanese currency is forcing a massive squeeze in futures, which were halfway to the moon at last check. This will prove especially painful for those who shorted the market on IBM's and TXN's misses after hours, and went to bed, only to wake up and find themselves with a several million dollar hole to fill, a barrel-sized vat of vaseline to make the pain a little more bearable, and an IOU to the BOJ. Bloomberg was kind enough to share some insight: "The yen declined for a second day against the dollar on speculation Japanese authorities may intervene to weaken the nation’s currency after it climbed to a seven-month high last week. “The strengthening of the yen has added to pressure on the BOJ to implement more reflationary policy,” said Mitul Kotecha, Hong Kong-based global head of foreign-exchange strategy at Credit Agricole CIB. “The risk is for a shift higher in dollar- yen in coming sessions from oversold levels.”
Readers will recall, that as we pointed out on Friday, the CFTC's COT report indicated that net long positions in the JPY are currently at all time highs. They will also recall our warning that the USD is poised to jump against all such overbought currencies, as Central Banks are just waiting to launch an FX-themes Kristalnacht against the speculators, especially with stress farce results imminent.
Spoos:
and the culprit himself:
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Go long vaseline?
I don't have a chart but I assume this means the ES has once again closed the gap with the AUDJPY.
Ben Bernanke: What are your feelings toward the US dollar?
ZH: I hate it!
Ben Bernanke: You must love it. It is not enough to obey it. You must love it.
Oh, and this effects those of us who actually work for our dollars, how does this affect us again Tyler??? Let me know please. I'm really comfortable in my chair right now and don't want to do the quarter twist of my elbow to reach the kleenex by my keyboard to cry for speculators unless it's absolutely necessary.
Ted, you don't have to give a crap about specs. Nobody should. But rest assured, every time a central bank intervenes to prevent the currency in your pocket from gaining purchasing power, you're being punked so that the bankers and the politicians don't have to suffer. Wake up, dude.
its a financial blog first and foremost TK. So yes, news like this does effect "us" that work for our $ in the financial markets. id suggest you keep your silly comments to yourself.
+ a trillion.
If you want populism [with a touch [or better said a shitton] of drivel] I suggest Denninger.
Sing from your trader/speculator hymnals now together with me children (that includes you Cheeky, sit up straight) "And my heart cries for you..... "
"Goldman says the dollar may weaken to as much as 83 yen in six months from an earlier call for it to trade at 94 yen. The greenback will buy 85 yen in three months and 90 yen in 12 months, compared to earlier predictions for 92 and 98 respectively."
Goldman at it again! How these guys still have clients is just amazing.
AUD ripping along on RBA commentary. If the farce tests are ok (as if they wont be) interest rate rise is likely. keep in mind RBA was also raising rates in Nov 2007 only to cut them in half in the following 6 months.
Great post again!
Tyler.
Watch: Moody's concern over Japan's political uncertainly.
Japan is one 'unrealized' massive write-down (or write off)
Dont you love those speculators, great job BOJ.
I JUST LOVE ZERO HEDGE!!!!!!!!!!!
"...a barrel-sized vat of vaseline to make the pain a little more bearable"
Actually I think the main reason for the ES rally is the news that China’s government may relax policy tightening measures. That caused a rally in Shanghai shortly after the open and a massive short squeeze in Hong Kong and Sydney. Tokyo, Korea, Taiwan and US futures rose in sync with that.
yeah that is the rumour on h2 export figures (apparently very bad).
metal spot prices are all down for July 2010. also india...
Also India?
Tantalizing!
What about India Chump?
Do tell.
ORI
http://aadivaahan.wordpress.com
I find this to be quite amusing, for one the the point of ted k who is likely one who does not like china's currency manipulation to even ask 'how this effects us'. To another point that people think that goldmans saks has people smart enough to lie about fx futures. To answer them both, Japan will keep devaluing thier currency until they can pay(or at least continue to borrow from thier own populis) and goldman is betting with comp(house) money and does not really care. The real question is can a reserve currency like ours get away with the same shit our proxy state Japan can? How much does the world want a world war? Will they let us drop our widget(the dollar) into a third? do they want oil and food to keep moving? or do they think they can be the next king of the world? Remember if we are out of the picture one sixth of the world dies to starvation. We are the meal if not the mealticket.
Not. Stocks open lower tomorrow. What's done is done.
Got lube?
Got zzz? Have a good night's sleep. Stocks bleed tomorrow.
f*** youre absolutely right Tyler. this is a one product market
I'm sure by the time the US market closes on Tuesday that we shall have reversed most of this farcical we are currently experiencing. The shearing sheds are now operating 24/07...now that's convenience.
So the BoJ wants to make sure what's left of Japanese savings gets gambled in the global spec casino? Or does this somehow help sell Toyotas made in China and the US? Or its just a vindictive smack down of FX traders?
Japan's export economy harmed by strengthening yen, BOJ keeps the hammer down to avoid harm to exports + it needs reflation desperately, even though it can't get it going. Like FRB.
The dollar has taken a dive in the past half hour... 82.35 on high volume.
And the Euro has gapped up to 1.3022
Update:
It's now about and hour later and everything is swinging the other way on high volume...
ES has now gone red...
Not so fast - Bloomberg announced that Hypo managed to fail the sham of a stress test. Euro flies from 1.297 to 1.303 on German PPI (lol) then back like nothing happened.
ES is back to post IBM level LMAO
Those short ES that went to bed with a smile will wake up with an even bigger smile.... unless their positions were liquidated due to late night margin calls
what happened to the Short Obama story? did the greece incident scare ZH ?
Come on BOJ, let the Aussie banks implode under their housing bubble. This is such a sucker's rally. The carry traders are going to get crushed if they stay in the AUD bonds.
The brewing disaster will leave the Great Depression as kids' stuff. Money will become worthless, only bartering accepted: food, guns, ammmunition, gold, silver are the new currency. Gloom and dispair will abound. And the people will turn their eyes to a new, ruthless Leader, that may eventually complete what famous Austrian left unattended. Good luck to you all folks.
"Good luck to you all folks."
You, of course, are circling the earth in your flying saucer and thus are far above all this insanity. Any room in the boot for one or two lucky souls?
Nah no UFO there I'm afraid, it's probably Henry Merritt Paulson jr.... trying out his new nick on ZH.
LMAO
Guess I'm still trying to figure out why the headline... the chart of AUD and the chart of AUDJPY over the same time period are roughly the same... USD/JPY hardly traded higher than its Tokyo hours low on Friday (before Japan took off for the 3-day weekend). We get all of a 40-pip move from the time 'Mrs Watanabe' wakes up to day-trade on the big cross (USD/JPY) to the high of her day and we call that an event...
Dear Hysterics,
I think you are wrong on this one.
Why would China 10% GDP growth need to ease ?. Something is rotten and it's not my ultra-short ETFs... At least at the open today.. The PPT will surely show itself for the 11am lunch time reversal mini pump and the 2:30pm ramp into a green closing. The only casino in the world with transparent cards at the blackjack table.
Got that one right, didn't I ?.
Market orchestars Goldman and others took the loss. You are right Tyler BOJ is deadly opponent. Margin call pick up the phone for Ben help.
XAUUSD / XAUEUR / XAUAUD bearish warnings issued since July 1 continue . . .
http://stockmarket618.wordpress.com/about
You know, I don't know a lot about fixed income, and even equities. But I know FX quite well, and this is most definitely NOT BoJ intervention. At least not like any BoJ intervention I have ever seen. When the BoJ intervenes, it is to the tune of several big figs. This was more a result of Australia's release and Japanese returning to their desk after a holiday.
It is simple, every country wants to devalue their currency against the others for trade gain and other benefits. Eventually they all may reach their intrinsic value (zero). This is why gold (and silver) are safer bets going long holding. Paper FIAT currencies have gone to zero many times over the course of history yet gold (and silver) will always have value.
race to the bottom. The US has the inside track.
Got a yen for making money?
I suggest you will now get pounded for not learning to preserve it.
The revolt of the colonies will be a sight to behold.
ORI
http://aadivaahan.wordpress.com
How much money are people going to lose trying to be short the yen? They read dreck like this and will lose even more. USDJPY is going to be trading in the 60s within the next 3 years. Japan has a 2.5 trillion net foreign asset position, while the yen is massively underowned by the rest of the world.
Yen bears have been crushed this year, and will continue to be crushed whatever the BOJ does. The Fed is a far deadlier opponent that the BOJ.
The jig is up. Japan now has to pay the piper for 20 years of flagrant FX manipulation, mercantilist trade policy, and deliberate undervaluaion of its currency. The timing may be inconvnient, but it doesn't change the fact that the dollar yen will someday trade with a 6 handle. Yen bears beware.