USDJPY Plummets After US Treasury Says It Should Refrain From "Competitive Devaluation"

Tyler Durden's picture

Curious why the USDJPY is in freefall after hours? Thank Jack Lew, and the after the close release of the semi-annual "Report to Congress on International Economic and Exchange Rate Policies." Traditionally the place where many have looked to see if the US would declare China a currency manipulator (which will never happen for obvious reasons), this time there was a big Easter egg lying in wait for those who did a word search for "competitive devaluation" - namely that it was located in the section discussing Japan.

To wit:

In order to support a stronger economic recovery and increase potential growth, it is important that Japan take fundamental and thoroughgoing steps to increase the dynamism of the domestic economy, by easing regulations that unduly deter competition in its domestic economy. Macroeconomic stimulus will be supportive in the short-term but cannot be a substitute for structural reform that raises productivity and trend growth. We will continue to press Japan to adhere to the commitments agreed to in the G-7 and G-20, to remain oriented towards meeting respective domestic objectives using domestic instruments and to refrain from competitive devaluation and targeting its exchange rate for competitive purposes.

"Refrain from competitive devaluation" - the last thing anyone who was long the USDJPY into the weekend wants to hear. Which is precisely why suddenly far fewer wanted to be long the USDJPY, which has crashed 50 pips in the last few minutes and is in literal freefall on this very confusing report, according to which it is not ok for Japan to print $80 billion per month, but it is perfectly ok for the US.

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101 years and counting's picture

margin calls in pm land.  the carryall endall dropping should make sunday night fun.  but only sun night because everything will be fixed once europe opens.

Pinto Currency's picture


Like Treasury scolding Japan, the pope tells the cardinals not to be perverts too.

Neither the pope nor the cardinals listen.

ACP's picture

Do as I say not as I do?

Kind of like one of Bloomberg's "Mayors Against Illegal Guns", who campaigns against guns, then fires one into the floor of his house to try intimidating a "male friend" into gay sex?

Not exactly uncommon now.

malikai's picture

Treasury? Who'se that? Last I heard it was the Fed who makes that call.


EscapingProgress's picture

This whole thing just keeps getting more and more ridiculous.

whotookmyalias's picture

This is the feeling I get when I look down and realize I've run off a cliff.

Harlequin001's picture

'USDJPY Plummets After US Treasury Says It Should Refrain From "Competitive Devaluation"'

There is no competion, it is absolute.

Pinto Currency's picture


A senior Obama Administration official tells Kyle Bass "we're just going to kill the dollar" and now Treasury tells Japan not to engage in competitive devaluation like that is some kind of I.P. that the Treasury owns:

Obama really will fundamentally change the nature of America - into a chaotic spiralling mess.




Pinto Currency's picture


Implications of the Obama Administration and Fed Reserve tag team to kill the dollar:


They will create chaos.

AlphaDawg's picture

Where do you get after hours fix rates?


10mm's picture

A good majority on that criminal council are felons.

mkhs's picture

Thank you captian obvious.  All progressives are that way.

YC2's picture

they will literally take it down to chinatown

Aknownymouse's picture

Is it at all possible that the FED meant what they said in their notes? That they will actually taper mid year 2013. Everyone seems convinced that they did not mean what they said. But wouldn't that be fighting the fed? Huh cnbc???'s picture

pot...kettle?  ....oh why even bother...

mammoth mo's picture

Nothing is curious about these manipulated markets.  I will say this however, Japan's QE signals an all in move.  When the markets stop going up then it will be Europe's turn.  The end result is Easing to infinity and market buying of vorthless assets.

NotApplicable's picture

Is that a German accent I detect?

mammoth mo's picture

vorthless = value worthless

CrashisOptimistic's picture

With lightning speed, this is becoming focused on Toyota vs GM/Ford.

ziggy59's picture

US hates as we say..., not as we do..

kliguy38's picture

I'm callin' BULLSHIT on their "jawboning"......LMFAO....they'll devalue the USD until the cows come home.......

debtor of last resort's picture

Joe the plummeter paging mr. Kuroda...

oddjob's picture

The use of the word refrain comfirms they have devalued it the past and will do so in the future.

kaa1016's picture

The fact that it could not break 100 with seemingly everyone short was a tell. Short TM or buy puts and buy FXY via calls. When sentiment becomes extreme as well as positioning, I take the other side of the trade. We'll see how it looks in a few days.

Clowns on Acid's picture

Jack Lew = incompetent dbag. Name a single competent in the Obama admin.....therefore why should any of this surprise anyone?


Dollar Bill Hiccup's picture

The left hand doesn't know what the right hand is doing ...

Maybe they want to talk down equities here, by putting a brake on the USDJPY move. Hat tip Vince Foster.

Make everyone happy, better place to reload.

ziggy59's picture

Timing is everything...

Mark123's picture

Like a serial rapist telling another serial rapist to stop raping so much....

Mark123's picture

....while raping a 6 year old blind, retarded girl.

WmMcK's picture

+1 - But stopping right there would have been best.

Yen Cross's picture

      Good it [usd/jpy] needs to fill the gap from April 5th close-7th open so I can add to my position. ;-)  

Joey9139122's picture

Our powers that be are such cocky, arrogant and hypocritical assholes on so many fronts.

mendigo's picture

So its not about the printing per se, its about why they are printing. Its about what they are thinking and feeing when they are printing - THAT is what we take issue with. A big tsk tsk Mr non-american printer person - Bad Banker! Maybe we should just let NK nuke-em a little.

It is good to know that in America we have government employees who remain ever vigilent of such misdeeds. Perhaps the SEC would like to weigh in on this one. I hope only the algos read those words - Que lastima.

css1971's picture

The BOJ have already stated they are printing specifically to create 2% domestic inflation and this has absolutely nothing to do with any devaluation of the currency.

So we're all good.

McMolotov's picture

"All animals are equal, but some animals are more equal than others."

Blano's picture

Well now we know one of the reasons for the gun grabbing diversion this week.

RazvanM's picture

Somebody will blink soon, then all the hell will break loose. I hope they will not start pushing red buttons.


Live, bloody revolutions, bitchezz!

Mark123's picture

Hey, what a cool trick.  Print money like mad, and the price of gold falls.  If I was selling gold I would be really upset about selling at the paper price. 

Bohm Squad's picture

Pot callin' the kettle black...thanks for triggering my stop loss guys.