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Yen Spikes On News Japan Set To Impose New Forex Margin Trading Rules

Tyler Durden's picture




 

Moments ago the 101 USDJPY tractor beam was broken, sending the pair lower, as a red headline hit the tape saying that...

  • JAPAN TO IMPOSE NEW RULES ON FOREX MARGIN TRADING, NIKKEI SAYS

Which incidentally was long overdue: with the BOJ scrambling to contain bond (and stock, if only to the downside) volatility, it was always the FX market that was the primary uber-levered culprit moving both asset classes. As such, it was very surprising that in a world in which all correlated asset classes (just look at the USDJPY-ES relationship) are driven by FX, that currency leverage and margin rules have remained largely untouched by regulators and central bankers whose credibility is suddenly slipping away, alongside the surge in global market volatility in the past week.

More from the Nikkei:

  • Changes are intended to protect investors and limit scope for speculation, Nikkei newspaper reports, without attribution.
  • Firms to be required to settle trade, even when rate movement favors trader; fine for violation up to 100m yen
  • FSA to restrict trading in binary options, will ban trades less than two hrs ahead as early as this yr
  • FSA to strengthen oversight of cos. with automated trading systems

While the details are still unclear, it is clear that Japan is finally focusing on JPY vol. Which also means that the days of unbridled soaring of the USDJPY pair are limited. And since the US market has been linked to the Yen for the past month, the spike in the Yen is what has caused a sudden air pocket under the US market to develop.

What happens further: we wait and see for the reaction by Mrs Watanabe in a few hours.

 

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Thu, 05/30/2013 - 15:37 | 3611307 slaughterer
slaughterer's picture

Here is the dip.  Buy it.  

Thu, 05/30/2013 - 15:41 | 3611310 Cult_of_Reason
Cult_of_Reason's picture

Do you really want to bet against an army of Mrs Watanabes (Japanese housewives have been determining the direction of the global markets for the past six months)?

Thu, 05/30/2013 - 15:41 | 3611318 ceilidh_trail
ceilidh_trail's picture

I thought the dip was in the Whitehouse?

Thu, 05/30/2013 - 15:51 | 3611335 astoriajoe
astoriajoe's picture

he's been bought already, although its possible he's rehypothicated, so maybe you can find him on loan somewhere.

Thu, 05/30/2013 - 16:00 | 3611348 Cult_of_Reason
Cult_of_Reason's picture

 ~35% of all global yen flows were secondary to Japanese retail accounts during the last 3 months.

 

 

BTW, it will be fun to watch a massive carry trade unwind (maybe even another LTCM blowing up).

Thu, 05/30/2013 - 16:00 | 3611378 fonzannoon
fonzannoon's picture

Yes it will. The wheels are coming off.

Thu, 05/30/2013 - 16:11 | 3611404 NotApplicable
NotApplicable's picture

It's a sad day when you can't even figure out who owns you.

Thu, 05/30/2013 - 16:09 | 3611398 negative rates
negative rates's picture

No, there are dips all around, it's like a pit fall, better to be avoided and out of sight.

Thu, 05/30/2013 - 16:37 | 3611465 angel_of_joy
angel_of_joy's picture

That would be the dip-stick.

Thu, 05/30/2013 - 15:39 | 3611312 lolmao500
lolmao500's picture

The BOJ wants a market like the US where there's no volume so they can easily rig it....

Thu, 05/30/2013 - 15:47 | 3611313 slaughterer
slaughterer's picture

 

  • FSA to restrict trading in binary options, will ban trades less than two hrs ahead as early as this yr
  • FSA to strengthen oversight of cos. with automated trading system

 

 

THOSE LULES SUCK!

WATANABE NOT HAPPY!

Thu, 05/30/2013 - 15:49 | 3611338 gatorengineer
gatorengineer's picture

those rules Ruck.... Fixed it for ya...

Thu, 05/30/2013 - 17:26 | 3611615 alphamentalist
alphamentalist's picture

"FSA to strengthen oversight of cos. with automated trading systems"

Seen these lads in action and they generaly not he sharpest tools in the shed. What might be of interest here is that the Japan run up was probably something like half HFT. If they set up camp at the HFT shops they might dial some of their more aggressive algos back for a while? If that happens NKY price keeping/inflating becomes the responsibility of Mrs Watanabe alone (and the BoJ, I guess)?


 

Thu, 05/30/2013 - 15:40 | 3611315 dasein211
dasein211's picture

Me margin you long time!

Thu, 05/30/2013 - 15:41 | 3611317 ZeroPoint
ZeroPoint's picture

Can we please just skip ahead to the hyperinflationary collapse, bank closings, grocery stores shuttered, and let the SHTF? I don't have all decade.

 

 

Thu, 05/30/2013 - 15:44 | 3611329 Ahmeexnal
Ahmeexnal's picture

I hope you have a faraday suit when that happens.

Thu, 05/30/2013 - 16:14 | 3611412 Cdad
Cdad's picture

LOL....so true.  It is so painfully obvious to all of us here on ZH...the status quo long ago failed.  And now, four years later, the theatre of the "recovery" is so obviously a joke...it feels like that...waiting for the truth and the pain of such colossal failure to finally arrive. 

It will...just as soon as a few hedge funds get wiped out on the Yen carry trade...which shouldn't take too long.  

And doesn't that sound familiar...the busted Yen carry trade?  It should.

Thu, 05/30/2013 - 15:43 | 3611321 Dr. Engali
Dr. Engali's picture

Why bother keeping the illusion of actual markets? Tell us what the prices will be and cut out the pretense.

Thu, 05/30/2013 - 15:45 | 3611324 lolmao500
lolmao500's picture

Russia and Ukraine sending 72 000 ``volunteers`` soldiers to fight alongside Assad?? wtf?? Just like China sending ``volunteers`` to fight alongside the NKoreans in the Korean war? This could get real nasty.

http://www.liveleak.com/view?i=311_1369928086

 

Thu, 05/30/2013 - 16:05 | 3611391 reload
reload's picture

So the `volunteers` recieve guaranteed Syrian citizenship.....or perhaps they become Assad`s pallace guard / babysitters while still dancing the Putin tune. Assad has no choice; but he must have reservations?

Either way if true (& I have no reason to doubt it) the rebel forces (Quatari, US, UK,  French $ Isreali mercenaries) are going to get some serious trouble.

Meanwhile the Syrians who have not fled or taken sides will have to do so soon.

I would love to see Obamas reaction to this news, and bloody William Hague (UK regime changer in chief - I mean foreign minister)

Thu, 05/30/2013 - 17:01 | 3611550 lolmao500
lolmao500's picture

I bet some of these ``volunteers`` will be specialists to man the S-300s...

Thu, 05/30/2013 - 18:52 | 3611808 Aurora Ex Machina
Aurora Ex Machina's picture

You. Know. Nothing.

You really think Moscow would advertise this via LiveLeak? Are you stupid or paid? Who the HOLY FUCK would want citizenship of Syria at this point in time? How many Chinese do you see queuing up for an Afghanistani passport? How many refugees are in Turkey / Jordan wondering why they couldn't escape to the UK / Greece / EU due to their passports?

 

Seriously? You're either functionally retarded or paid to do this. I hope it's the latter, otherwise...

Thu, 05/30/2013 - 16:11 | 3611403 GoldForCash
GoldForCash's picture

So it will be 72,000 soldiers of fortune not a Russian invasion.....yea right. Kill themall.

Thu, 05/30/2013 - 16:43 | 3611484 angel_of_joy
angel_of_joy's picture

Works in reverse too...

Thu, 05/30/2013 - 17:38 | 3611641 lolmao500
lolmao500's picture

And I bet all the NATO-Qatar-Saudi Arabia funded, armed and trained terrorists are not a western invasion, but soldiers of fortune? Yeah right.

Thu, 05/30/2013 - 18:43 | 3611830 Aurora Ex Machina
Aurora Ex Machina's picture

Please, get a grip. Here's a crash course. (And yes, that's pro-Western bias).

 

There's a multiplicity of actors on this stage, and while some of them are indeed what you stated, your grasp of the complexity is extremely limited.

Thu, 05/30/2013 - 16:33 | 3611458 Aurora Ex Machina
Aurora Ex Machina's picture

Yeah... whoever made that should have remembered the old style Ukrainian Hammer and Sickle was yellow on blue, the orange is a wrong note.

 

I re-read Dispatches the other day. I'd suggest you find a copy & bear it in mind. Wise words in this link.

 

 

Re-post, but really? You even know who that man is, or if he's not just a Russian speaker living in some other country close by? Things to ponder, things to ponder.

Thu, 05/30/2013 - 16:55 | 3611533 Rustysilver
Rustysilver's picture

Russia and Ukraine have no "volunteers".  You have to serve 2 years.  Period,  You can't say that you have something else to do.

Now, for the right price many will go.

Thu, 05/30/2013 - 17:37 | 3611639 lolmao500
lolmao500's picture

The volunteers ain't about their enlisting policies but about how they ``volunteer`` to go fight in Syria.

Thu, 05/30/2013 - 18:54 | 3611748 Aurora Ex Machina
Aurora Ex Machina's picture

Seriously, you have any real evidence barring a shitty video I could make in Iceland if I had a rough knowledge of ancient Soviet symbols (that haven't been used for over twenty years and certainly not in the armed forces of either Russia or the Ukraine, which are different countries now, you muppet, although we did like the Orange flag tint to trigger your pitiful knowledge of the Ukrainian Orange Revolution), a 19 yr old art student who made the flag wrong (Hammer & Sickle with an Islamic Star over it! How. Fucking. Childish, and it's the wrong fucking colors) & a Russian speaker who I might pay a bottle of vodka to? (Not even going to comment on the accent dear: hint, it's a give-away).

And yes, I'm calling you out on your bullshit. Noticed it heavily in the cyberwar / hack stuff (seriously: 8 hrs after I posted my rebuttal, numerous serious Western cyber security outfits came out agreeing with my thoughts, stating: "Nah, this story is shit, it's being leaked to push an agenda, ignore it". I suggest you go find them all - I've counted 7 so far. Or I could post them and gut you).

Who is paying you btw? I refuse to think you're this dumb for real, call it my bias for keeping your species around. RAH RAH RAH WAR WAR WAR.

 

Fucking spook. It's sad your training is so shit, or that you think that American rhinos will fall for this level of unsophisticated mimetic warfare. Get another job. At best this is silly pro-Assad morale boosting, at worst it's a shitty M-OSS-AD OP taking the piss out of dumb GOP members like McCain. You're out of your pay grade, I'd suggest a retreat. But, hey, I'm bored: let's play by the 8 rules.

 

Please come at me, let's see what you've got. Otherwise, STFU, you're a muppet.

 

 

p.s. Yes, we get the Avatar. Now fuck off before I crucify you; you're burnt.

Thu, 05/30/2013 - 15:46 | 3611331 XRAYD
XRAYD's picture

We need margin increased on trading EVERYTHING here!

Thu, 05/30/2013 - 15:50 | 3611343 ...out of space
...out of space's picture

looks like a usdjpy go to 96 and eurusd 1,35

Thu, 05/30/2013 - 15:52 | 3611349 fonzannoon
fonzannoon's picture

that should do wonders for the nikkei.

Thu, 05/30/2013 - 15:58 | 3611371 Dr. Engali
Dr. Engali's picture

Yeah watch all the gains get vaporized and then some.

Thu, 05/30/2013 - 16:01 | 3611380 fonzannoon
fonzannoon's picture

I almost can't get past the thought of their stock market vaporizing while their currency gets the benefit of getting bid, as well as their stock market. I am waiting for them all to go up in smoke in unison.

Thu, 05/30/2013 - 16:05 | 3611389 Dr. Engali
Dr. Engali's picture

Now if the yen spikes and their market goes up while bonds stay stable I might just take the blue pill.

Thu, 05/30/2013 - 16:08 | 3611396 fonzannoon
fonzannoon's picture

Sorry I meant to say as well as their bond market.

It seems like everyone is choosing between the Nikkei and the JGB market and the Yen is the deciding factor. I am waiting for the moment the Yen sells off, the Nikkei sells off AND JGB's sell off.

Granted I may be waiting a while but I have been waiting 4 years already....

I am starting to feel like this guy.

http://www.youtube.com/watch?v=aPwGvzhUkB0

Thu, 05/30/2013 - 16:10 | 3611402 TheEdelman
TheEdelman's picture

queue kyle bass Oh-face.  

Off topic, anyone else notice Haymon dumped over 20% of total holdings?  All their real estate stuff... 

Thu, 05/30/2013 - 15:52 | 3611350 Yen Cross
Yen Cross's picture

  Based on what I've read about the changes, they don't really seem to be anything substancial. Eg; no changes in spot leverage ratios.

Thu, 05/30/2013 - 15:54 | 3611354 bonzo112358
bonzo112358's picture

I know this was over 3 years ago, but didn't a yen spike precede the flash crash?

Thu, 05/30/2013 - 15:59 | 3611375 jubber
jubber's picture

Does this indirectly kill the Gold spike?

Thu, 05/30/2013 - 16:03 | 3611387 fonzannoon
fonzannoon's picture

I hate to say it but if everything goes to shit and the banks somehow managed to get net long gold, those holding paper gold may enjoy a nice free ride higher.

Thu, 05/30/2013 - 18:36 | 3611798 TrulyStupid
TrulyStupid's picture

Present market conditions seem to indicate that folks are selling paper gold (GLD) and buying physical ...prices of physical is at a premium to paper and volume of physical buys is going through the roof. Once the physical buying overwhelms the GLD shorting, add in some margin increases and presto.. historical short squeeze in GLD and price of both going north fast. Theoretically.

Thu, 05/30/2013 - 15:59 | 3611376 Goldbugger
Goldbugger's picture

50,000 troups heading to Synria from Ukraine.

 

http://www.liveleak.com/view?i=311_1369928086

Thu, 05/30/2013 - 16:30 | 3611444 Aurora Ex Machina
Aurora Ex Machina's picture

Yeah... whoever made that should have remembered the old style Ukrainian Hammer and Sickle was yellow on blue, the orange is a wrong note.

 

I re-read Dispatches the other day. I'd suggest you find a copy & bear it in mind. Wise words in this link.

Thu, 05/30/2013 - 16:00 | 3611377 SheepDog-One
SheepDog-One's picture

Isn't 'Forex' a condom brand?

Thu, 05/30/2013 - 16:23 | 3611433 NipponMarketBlog
NipponMarketBlog's picture

 

 

Is this the first small and innocuous-looking step towards capital control?

 

http://nipponmarketblog.wordpress.com/

Thu, 05/30/2013 - 19:02 | 3611888 BigInJapan
BigInJapan's picture

@NMB
I don't know about you, but I should have 90% of my holdings out of Japan by next Friday. None too soon, methinks. Screw Abe and his money trap.

Thu, 05/30/2013 - 16:35 | 3611462 AldoHux_IV
AldoHux_IV's picture

another form of cap controls if you really think about it.

Thu, 05/30/2013 - 18:03 | 3611704 Colonel Klink
Colonel Klink's picture

Forex margin trading rules....sounds like a capital control to me.

Thu, 05/30/2013 - 18:23 | 3611771 BigInJapan
BigInJapan's picture

Step 2: Ban short selling.
Step 3: Capital controls.
Step 4: ?

Do NOT follow this link or you will be banned from the site!