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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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment EscapingProgress
EscapingProgress's picture

This whole thing just keeps getting more and more ridiculous.

Fri, 04/12/2013 - 22:27 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment AlphaDawg
AlphaDawg's picture

Where do you get after hours fix rates?


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

A good majority on that criminal council are felons.

Fri, 04/12/2013 - 22:01 | Link to Comment mkhs
mkhs's picture

Thank you captian obvious.  All progressives are that way.

Fri, 04/12/2013 - 16:43 | Link to Comment YC2
YC2's picture

they will literally take it down to chinatown

Fri, 04/12/2013 - 17:32 | Link to Comment 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 | Link to Comment's picture

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

Fri, 04/12/2013 - 16:42 | Link to Comment 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 | Link to Comment NotApplicable
NotApplicable's picture

Is that a German accent I detect?

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

vorthless = value worthless

Fri, 04/12/2013 - 17:17 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

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

Fri, 04/12/2013 - 16:42 | Link to Comment ziggy59
ziggy59's picture

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

Fri, 04/12/2013 - 16:43 | Link to Comment 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 | Link to Comment resurger
resurger's picture

All corrupt

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

Joe the plummeter paging mr. Kuroda...

Fri, 04/12/2013 - 16:58 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment NotApplicable
NotApplicable's picture

TOTUS is fairly reliable.

Fri, 04/12/2013 - 16:48 | Link to Comment 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 | Link to Comment Smuckers
Smuckers's picture

Sweep the leg.

Fri, 04/12/2013 - 16:51 | Link to Comment ziggy59
ziggy59's picture

Timing is everything...

Fri, 04/12/2013 - 16:53 | Link to Comment Mark123
Mark123's picture

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

Fri, 04/12/2013 - 17:01 | Link to Comment oddjob
oddjob's picture

....while raping.

Fri, 04/12/2013 - 17:10 | Link to Comment Mark123
Mark123's picture

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

Fri, 04/12/2013 - 21:53 | Link to Comment WmMcK
WmMcK's picture

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

Fri, 04/12/2013 - 17:29 | Link to Comment 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 | Link to Comment malikai
malikai's picture

Looks like NZDJPY is the one to watch.

Fri, 04/12/2013 - 17:02 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment McMolotov
McMolotov's picture

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

Fri, 04/12/2013 - 20:58 | Link to Comment 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 | Link to Comment nmewn
nmewn's picture

Fucking thieves.

Fri, 04/12/2013 - 17:02 | Link to Comment 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 | Link to Comment 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 | Link to Comment CheapBastard
CheapBastard's picture


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

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

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

It's plummeteth.

Fri, 04/12/2013 - 17:28 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment All_Is_Well
All_Is_Well's picture

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

Fri, 04/12/2013 - 20:26 | Link to Comment robertocarlos
robertocarlos's picture

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

Fri, 04/12/2013 - 20:40 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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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