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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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Fri, 04/12/2013 - 16:39 | 3442747 101 years and c...
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.

Fri, 04/12/2013 - 16:43 | 3442767 Pinto Currency
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.

Fri, 04/12/2013 - 16:47 | 3442794 ACP
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.

Fri, 04/12/2013 - 16:49 | 3442821 malikai
malikai's picture

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


Fri, 04/12/2013 - 17:03 | 3442874 EscapingProgress
EscapingProgress's picture

This whole thing just keeps getting more and more ridiculous.

Fri, 04/12/2013 - 22:27 | 3443847 whotookmyalias
whotookmyalias's picture

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

Sat, 04/13/2013 - 09:06 | 3444306 Harlequin001
Harlequin001's picture

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

There is no competion, it is absolute.

Sat, 04/13/2013 - 09:33 | 3444328 Pinto Currency
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.




Sat, 04/13/2013 - 13:41 | 3444768 Pinto Currency
Pinto Currency's picture


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


They will create chaos.

Sat, 04/13/2013 - 15:50 | 3445036 AlphaDawg
AlphaDawg's picture

Where do you get after hours fix rates?


Fri, 04/12/2013 - 17:28 | 3442983 10mm
10mm's picture

A good majority on that criminal council are felons.

Fri, 04/12/2013 - 22:01 | 3443790 mkhs
mkhs's picture

Thank you captian obvious.  All progressives are that way.

Fri, 04/12/2013 - 16:43 | 3442768 YC2
YC2's picture

they will literally take it down to chinatown

Fri, 04/12/2013 - 17:32 | 3443002 Aknownymouse
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???

Fri, 04/12/2013 - 16:41 | 3442748's picture

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

Fri, 04/12/2013 - 16:42 | 3442755 mammoth mo
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.

Fri, 04/12/2013 - 16:44 | 3442785 NotApplicable
NotApplicable's picture

Is that a German accent I detect?

Fri, 04/12/2013 - 16:49 | 3442809 mammoth mo
mammoth mo's picture

vorthless = value worthless

Fri, 04/12/2013 - 17:17 | 3442942 CrashisOptimistic
CrashisOptimistic's picture

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

Fri, 04/12/2013 - 16:42 | 3442769 ziggy59
ziggy59's picture

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

Fri, 04/12/2013 - 16:43 | 3442770 kliguy38
kliguy38's picture

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

Fri, 04/12/2013 - 16:43 | 3442777 resurger
resurger's picture

All corrupt

Fri, 04/12/2013 - 16:44 | 3442778 debtor of last ...
debtor of last resort's picture

Joe the plummeter paging mr. Kuroda...

Fri, 04/12/2013 - 16:58 | 3442779 oddjob
oddjob's picture

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

Fri, 04/12/2013 - 16:45 | 3442783 kaa1016
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.

Fri, 04/12/2013 - 16:48 | 3442801 Clowns on Acid
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?


Fri, 04/12/2013 - 16:54 | 3442838 NotApplicable
NotApplicable's picture

TOTUS is fairly reliable.

Fri, 04/12/2013 - 16:48 | 3442802 Dollar Bill Hiccup
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.

Fri, 04/12/2013 - 16:50 | 3442816 Smuckers
Smuckers's picture

Sweep the leg.

Fri, 04/12/2013 - 16:51 | 3442822 ziggy59
ziggy59's picture

Timing is everything...

Fri, 04/12/2013 - 16:53 | 3442839 Mark123
Mark123's picture

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

Fri, 04/12/2013 - 17:01 | 3442871 oddjob
oddjob's picture

....while raping.

Fri, 04/12/2013 - 17:10 | 3442913 Mark123
Mark123's picture

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

Fri, 04/12/2013 - 21:53 | 3443769 WmMcK
WmMcK's picture

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

Fri, 04/12/2013 - 17:29 | 3442842 Yen Cross
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. ;-)  

Fri, 04/12/2013 - 16:58 | 3442858 malikai
malikai's picture

Looks like NZDJPY is the one to watch.

Fri, 04/12/2013 - 17:02 | 3442863 Joey9139122
Joey9139122's picture

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

Fri, 04/12/2013 - 17:07 | 3442866 mendigo
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.

Fri, 04/12/2013 - 17:28 | 3442986 css1971
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.

Fri, 04/12/2013 - 17:01 | 3442870 TheFulishBastid
TheFulishBastid's picture

Hello all!


Don't know where else to post this lil tidbit, so here's where it'll go..


Seems legit

Fri, 04/12/2013 - 17:30 | 3442996 McMolotov
McMolotov's picture

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

Fri, 04/12/2013 - 20:58 | 3443630 Blano
Blano's picture

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

Fri, 04/12/2013 - 21:08 | 3443657 nmewn
nmewn's picture

Fucking thieves.

Fri, 04/12/2013 - 17:02 | 3442876 RazvanM
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!

Fri, 04/12/2013 - 17:07 | 3442898 Mark123
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. 

Fri, 04/12/2013 - 17:17 | 3442943 CheapBastard
CheapBastard's picture


Fri, 04/12/2013 - 17:23 | 3442966 Bohm Squad
Bohm Squad's picture

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

Fri, 04/12/2013 - 17:26 | 3442974 100pcDredge
100pcDredge's picture

It's plummeteth.

Fri, 04/12/2013 - 17:28 | 3442984 Everybodys All ...
Everybodys All American's picture

Say what you will but the market is indicating the dollar devaluation may be ending. Commodities got absolutely hammered today. The only out lier is the stock market which has no concept of reality and hasn't for quite some time.

Fri, 04/12/2013 - 17:49 | 3443058 Everybodys All ...
Everybodys All American's picture

One other thing. Don't think for a moment that the US Treasury didn't see the agreement the Chinese and Austalians reached on trading without the US dollar. Losing the dollars reserve currency would be extremely detrimental to US interests.

Fri, 04/12/2013 - 17:29 | 3442988 Joebloinvestor
Joebloinvestor's picture

I really have to laugh at they way they frame this as a fucking sports game and we are in the bleachers.

"competitive devaluation" (US)

"Hail Mary for economy" (Japan)

This fucking game of Economic Musical Chairs is gonna end with no chairs left when the music stops.

The price of gold is being pounded while it is being seized by Money Printing Dictatorships and no one thinks something is up?

Japan is printing like all get out, because in short order there will be NO FUCKING ISLAND or GOVERNMENT to back it up.



Fri, 04/12/2013 - 17:32 | 3442998 Seer
Seer's picture

WASHINGTON (Reuters) - The Obama administration said on Friday that China's currency remained "significantly undervalued," but again stopped short of labeling the world's second-biggest economy a currency manipulator.

No, I'm not going to call you a fucking cock-sucker!  So, people, please, don't think that this is what I'm claiming!  DON'T PANIC!

Can't we just shoot all of them and put them out of our misery?

Fri, 04/12/2013 - 17:33 | 3443007 vote_libertaria...
vote_libertarian_party's picture

Because we believe in a strong dollar policy....BBBBWWWAAAAHAHAHAHA!!!!!!


(sorry, I couldn't contain my laughter)

Fri, 04/12/2013 - 18:39 | 3443203 All_Is_Well
All_Is_Well's picture

classic usd/jpy drop after the close........

Fri, 04/12/2013 - 20:26 | 3443518 robertocarlos
robertocarlos's picture

"Jack Lew's signature" That is a ZH classic.

Fri, 04/12/2013 - 20:40 | 3443560 BackOffice Slut
BackOffice Slut's picture

Does anyone else find this odd? Just yesterday North Korea tells Japan that they were going to be targeted,  the pentagon saying they have the capability to load a nuke, and now this. Wow.


Fri, 04/12/2013 - 20:55 | 3443618 Blano
Blano's picture

I know nothing about forex, and just noticed I haven't seen Orly around lately which is too bad, I was enjoying her posts.

Anyways, why is a drop from 98.90 to 98.20 so bad?  Doesn't seem like much.  Thanks to any who reply.

Fri, 04/12/2013 - 20:56 | 3443621 polo007
polo007's picture

Today a former Assistant Secretary of the US Treasury told King World News that the smash in gold and silver today was entirely orchestrated by the Federal Reserve. Former Assistant of the US Treasury, Dr. Paul Craig Roberts, also warned KWN that stocks of available physical gold are “rapidly declining.” Below is what Dr. Roberts had to say in this extraordinary and exclusive interview.

Eric King: “Dr. Roberts, we have this smash on gold and silver today. Gold down $75 at one point and silver was down $1.75, your thoughts here?”

Dr. Roberts: “This is an orchestration (the smash in gold). It’s been going on now from the beginning of April. Brokerage houses told their individual clients the word was out that hedge funds and institutional investors were going to be dumping gold and that they should get out in advance.

Then, a couple of days ago, Goldman Sachs announced there would be further departures from gold. So what they are trying to do is scare the individual investor out of bullion. Clearly there is something desperate going on that has one of the best gold & silver purchase & storage platforms

“I have assumed from the beginning that it is the Fed’s concern with the dollar because the dollar is being printed in huge quantities at the same time that other countries are abandoning the use of the dollar as international payment.

The exchange value of the dollar is (being) threatened, and if that collapses the Fed loses control over interest rates. Then the bond market blows up, the stock market blows up, and the banks that are too big to fail, fail. So it’s an act of desperation because they’ve got to establish in people’s minds that the dollar is the only safe place, it is the only safe haven, not gold, not silver, and not other currencies.

And to help protect this policy they have convinced or pressured the Japanese to inflate their own currency. The Japanese are now going to print money like the Fed. They are lobbying the ECB to print more. So I see this as a dollar protection policy.

...I know where the gold is coming from in the market, it’s just paper. It’s naked shorts, there is no gold there. If somebody wanted to take delivery on those contracts nobody would be able to provide it. I don’t know what the source of the (physical) gold is. Some people are saying that the actual stocks available for possession are rapidly declining.”

Eric King: “Going forward, Dr. Roberts, what do you expect out of all of this? If the gold is coming out of Western central bank vaults and flowing to the East, the old saying is, ‘So goes the gold, so goes the power.’”

Dr. Roberts: “Well, I think the power of the West has already been lost. When you have off-shored your manufacturing and professional service jobs, you’ve hollowed out your economy. So gold or no gold, the United States economy has been severely damaged and I don’t think it can recover.

This gold business (smash in price) is something to do with the dollar. They are trying to save this Federal Reserve policy of negative real interest rates. You can’t do that if the dollar loses value relative to gold because it implies it should be losing value relative to other currencies.

If the dollar’s exchange value drops, then the price of imports that come in here (to the US) rise. So you get domestic inflation, and if you have domestic inflation you can’t have zero interest rates, or negative real interest rates. So the Fed would lose control and that’s the basis of this policy.

They are trying to destroy gold as a (safe) haven from the dollar in order to carry on the Fed’s policy of negative real interest rates. That is what is driving the illegal policy of selling naked shorts in order to manipulate a market. If you and I were to do something like this without the government’s instruction or protection, we would be arrested (laughter ensues). So the fact that it’s illegal, being done by the authorities, tells me that they are seriously worried about the dollar.”

Sat, 04/13/2013 - 09:01 | 3444302 GrinandBearit
GrinandBearit's picture

KWN is always bullish.  Most of their calls are wrong.  Jim Sinclair's calls of $3000-5000 over the short term are totally absurd.  His credibility has been severely damaged.

For those who have been waiting since $1900, these recent price smack downs are a huge gift.  

Fri, 04/12/2013 - 23:03 | 3443915 holdbuysell
holdbuysell's picture

The mere utterance of a word has the automatic algos go into a frenzy. This can't end well.

Reminds me of this:

Bugs Bunny Hocus Pocus:

Fri, 04/12/2013 - 23:03 | 3443917 WallowaMountainMan
WallowaMountainMan's picture

no, no, no...

cover story...fed can not raise japan...required amount of raise destroys credibility rendering fed raise impotent...

all in, japan fixed in the lead. cannot be out-debased in the race to export. no one has the power to do it.

no matter the scenarios, japan (ex-nukes) is the winner in the relative easing race. calling collapses the system, raising goes down in history.

buy everything japanese.

after the collapse.

they are, after all, mostly in debt to themselves. its not like japan aint buying up all the paper marked 'made in japan'. its a one match solution. or a reverse split of a trillion or so to one.

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