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After Six Standard Deviation Jump, USDJPY Intervention Loses 38.2% In 30 Minutes

Submitted by Tyler Durden on 10/30/2011 22:21 -0400

Thanks to Mr. Azumi's clearly unique perspective on Japanese currency fundamentals, USDJPY managed to peak with a six standard deviation move, bested only by 10/28/08 (what a weekend) before all the way back to 1995. However, as always with his unilateral decisions, the market seems to know best and we have already given back over 38% of the drop. Interestingly, broad risk markets have not enjoyed this move at all as correlations are not helping the Japanese cause and ES continues to leak lower.

USDJPY has given back 120pips from its highs having retraced almost perfectly (for Fibonacci fans) 38.2%.

The 6 standard deviation jump is second only to the spike on 10/28/08 (what a great 3 year anniversary?). Is it something about Halloween that gets the BoJ going? Prior to this, the previous largest move was in 1995!!

With Regling's comments on Japan's ongoing commitment to buying EFSF bonds, perhaps Azumi was just making some room?

Furthermore, for some perspective on what this kind of move in EURJPY (or JPY crosses in general) 'should' have meant for ES (based on empirical correlations/deltas), ES is testing Friday's lows around 1274 while the 'model' says it should be trading around 1299!!! Seems like risk-off is overwhelming Azumi's efforts.

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Sun, 10/30/2011 - 22:28 | 1827323 bob_dabolina

Over 78.6% again

Sun, 10/30/2011 - 22:35 | 1827345 Thomas

Bad Kharma. It's not nice to mess with Mother Nature.

Sun, 10/30/2011 - 22:43 | 1827365 HedgeAccordingly

Money never sleep.. nor do i - http://hedge.ly/vTm4LA

Sun, 10/30/2011 - 22:48 | 1827375 trav7777

looks like it just found another gear...79.26

Sun, 10/30/2011 - 22:55 | 1827387 erg

Long Gravol.

Sun, 10/30/2011 - 23:27 | 1827426 Mr Lennon Hendrix

Azumi never satisfied

Sun, 10/30/2011 - 22:38 | 1827355 Mike2756

yeah, bounce did not last long.

Sun, 10/30/2011 - 22:43 | 1827364 bob_dabolina

To shamelessly steal from Tyler.

It bounced inversely

Sun, 10/30/2011 - 23:24 | 1827425 DoChenRollingBearing

Remember though, price movements are NOT a normal distribution.

BIG prices moves are much more common than the normal distribution would imply.

Both Mandelbroit and Taleb have written about this.

But, I certainly do not take away the news that these are huge moves in the FX markets. Interesting times we live in.

Sun, 10/30/2011 - 22:25 | 1827325 rumblefish

bullish for the dow!

Sun, 10/30/2011 - 23:29 | 1827430 Mr Lennon Hendrix

I don't think so. This should help see a retrace of EUR/USD to about $1.35, which should move the Dow back to 11,500

Sun, 10/30/2011 - 22:26 | 1827326 Yen Cross

Exactly what I thought! I T/P , and will just moniter the screens. Month end flows in gbp expected as well.

Mon, 10/31/2011 - 00:00 | 1827519 slewie the pi-rat

month-end sigma stacking, Y/C!

the printers are pounding and the pounders are printing

Sun, 10/30/2011 - 22:28 | 1827329 Lady Heather...UNCLE

...am going nowhere near this mad fucking market

Sun, 10/30/2011 - 23:52 | 1827499 HellBoy6

The next two days I gotta think this market is better sold than bought. That being said I wouldn't do it with gusto but still think there is some money to be made being moderately short.

Happy hunting!

Sun, 10/30/2011 - 23:54 | 1827500 MFL8240

Its not the market, its your goverment that is mad.

Sun, 10/30/2011 - 22:29 | 1827333 chump666

hahahahaha I love it.

Aug 4 Japan intervened and the guts of the market fell out. Same flow. Something is up.

Sun, 10/30/2011 - 22:36 | 1827347 NOTW777

AUG 4 - AUG 9

spx 1260 - 1100 (low)

Sun, 10/30/2011 - 22:44 | 1827366 chump666

http://www.reuters.com/article/2011/08/04/us-markets-forex-yen-timeline-...

http://www.nytimes.com/2011/08/05/business/markets.html?pagewanted=all

= history repeating?

...just sayin

Sun, 10/30/2011 - 22:30 | 1827334 technovelist

And gold has dropped $27 in less than an hour.

Sun, 10/30/2011 - 22:39 | 1827353 Albertarocks

Haha. I sold the majority of my physical silver this afternoon. Expect to be able to buy it back considerably cheaper as the dollar should finally rocket properly from here. Know what I paid for that silver? $7.40.

Sun, 10/30/2011 - 23:09 | 1827413 Albertarocks

LOL... I didn't even like that comment. Gave it minus myself. But I'm still laughin'.

Sun, 10/30/2011 - 23:54 | 1827505 MFL8240

Throw him a dog bisquit!

Sun, 10/30/2011 - 22:34 | 1827342 gwar5

They try and they try..... three years ago the YENUSD was about 115, we've almost a 1/3 in a short time.

Sun, 10/30/2011 - 22:37 | 1827343 Reese Bobby

I take it back...WTF!

Sun, 10/30/2011 - 22:45 | 1827371 Mike2756

wtf is right! blowing through 1.26.

Sun, 10/30/2011 - 22:37 | 1827348 bob_dabolina

Dammmmmmmmnnnnnnn

Look at usd/jpy right now....siiiiiiicccckkkk

I can't wait to see who the next Kweku Abdoli is

Sun, 10/30/2011 - 23:03 | 1827377 X.inf.capt

hey boss,

did you see tres. yields

people are running for cover, big time....

3 month 0.00%

dow futures down -58

gold down to1713

yep, welcome to black monday, on halloween day....

TRICK OR TREAT....................BITCHEZ!

at least you have to admire the dark humor of TPTB

Sun, 10/30/2011 - 23:29 | 1827431 DoChenRollingBearing

Hey Cap'n

Just a few hours ago (6:00 PM ET) things looked like they were going to be pretty calm. Maybe not so much now. So gold is down to $1713 (or whatever now, I'll go check in a bit), big deal.

Trick or treat, bitchez! <--- Nice one!

Sun, 10/30/2011 - 23:37 | 1827450 X.inf.capt

thanks, bearing,

+1 back at cha

Sun, 10/30/2011 - 23:40 | 1827456 DoChenRollingBearing

Gold now down $35.00!

Man o man, The Bitchez That Be (TBTB^tm) are smoking our asses tonight!

Sun, 10/30/2011 - 23:46 | 1827472 Mr Lennon Hendrix

Bring out the dip!

Sun, 10/30/2011 - 23:49 | 1827484 X.inf.capt

no fear, brother,

no fear

i hope they drop PM's big time...

yeah, i'd love a nother BTFD opportunity....

cut that bitch in half, and i'll back that truck up so fast.....

Sun, 10/30/2011 - 23:30 | 1827435 Mr Lennon Hendrix

The PTB love October, because it symbolizes death (to them).

Sun, 10/30/2011 - 23:39 | 1827454 X.inf.capt

Sun, 10/30/2011 - 22:36 | 1827349 Lone Deranger

EUR/JPY up almost 500 pips.

Sun, 10/30/2011 - 22:36 | 1827350 Lone Deranger

EUR/JPY up almost 500 pips.

Sun, 10/30/2011 - 22:41 | 1827362 max2205

Not so fast. Going for 8 STD

Sun, 10/30/2011 - 22:44 | 1827367 smoked

yen akita bear market

Sun, 10/30/2011 - 22:46 | 1827372 Conax

Whoa! Gold under attack, 1,924,000 contracts with a drop in price of $29 starting about 9:40 PM eastern.

Silver down to $34.59 and trying to ease back up a tad. A bloody Monday folks. Whenever gold is assaulted, you know something bad happens to equities soon after.. Lookout below.

Sun, 10/30/2011 - 22:52 | 1827385 Mike2756

http://youtu.be/Xyh-JpWdGmQ

Sun, 10/30/2011 - 22:57 | 1827389 Conax

"Anything you say, chief!" ~ Moriarty

Sun, 10/30/2011 - 23:27 | 1827421 X.inf.capt

no positive waves today...

all i see is a tidal wave coming tomorrow...

SURFS UP......................BITCHEZ

and remember....

CHARLIE DONT SURF!

Sun, 10/30/2011 - 22:46 | 1827373 NOTW777

80.23 up next

Sun, 10/30/2011 - 22:47 | 1827374 Stuck on Zero

First Europe. Now Japan. Your move Mr. Bernanke. I assume you won't be outdone in this race to the bottom. It's a matter of national pride.

Sun, 10/30/2011 - 23:02 | 1827402 DonutBoy

Yep. For Japan - a USDJPY floor, just as the Swiss have a EURCHF floor. I hope I get to read Jim Rickards new book before the currency war goes thermonuclear.

Sun, 10/30/2011 - 23:36 | 1827441 Mr Lennon Hendrix

Bernanke was well aware of the Yentervention this weekend. Remember, Europe needs help; this move by the Japanese, and the coming move by the Fed, were telegraphed by Europe.

Bernanke will love to see stocks go lower tomorrow (the President's Working Group probably sold on Friday) so that his Fed meeting can announce an MBS buyback later this week (and the PPT can buy back in).

BTFD, bitchez! LOL!!

Sun, 10/30/2011 - 22:50 | 1827378 Reese Bobby

I guess every once in a while the Japanese have to remind everyone what crazy is all about. It's like a Global jail yard thing...

Sun, 10/30/2011 - 22:51 | 1827382 RobotTrader

Yep, more proof that a flood of paper can easily spook the gold longs, who are always overmargined F12-punching action junkies.

Sun, 10/30/2011 - 22:58 | 1827393 tickhound

And so consistently... this 11 year spookish manipulation to the upside

Sun, 10/30/2011 - 23:21 | 1827423 topcallingtroll

You are not really long gold if you can hit a button to buy and sell.

The true longs have it buried in their back yards.

But it is time for paper to shine for a while. I think stocks will iutperform gold, at least high beta.

Sun, 10/30/2011 - 23:42 | 1827440 DoChenRollingBearing

"The true longs have it buried in their back yards."

Very true, or the metaphorically equivalent. I do not let price of gold influence my decision to buy. When I have some extra dough, I buy. Sometimes I'll buy a little extra on a downdraft, you know BTFD...

Mon, 10/31/2011 - 05:35 | 1827837 Davalicious

>The true longs have it buried in their back yards.

Hope you don't encounter shovels. That could scissor, paper, stones your stash into oblivion. Hope not ;-)

Sun, 10/30/2011 - 23:37 | 1827448 Mr Lennon Hendrix

Robo, have a ever told you how much I love your tits?

Sun, 10/30/2011 - 22:59 | 1827396 navy62802

Judging from the way futures are moving, it looks like we're headed for the much-beloved Rule 48 opening on Monday.

Sun, 10/30/2011 - 23:04 | 1827403 Mike2756

they're hardly moving, even oil is only down .60. all the action is in the metals.

Sun, 10/30/2011 - 23:44 | 1827467 MFL8240

As planned.

Sun, 10/30/2011 - 23:04 | 1827404 Sutton

Euro/Yen Bitchez!

Sun, 10/30/2011 - 23:09 | 1827412 Conax

NICK! HEATH! the BARN's ON FIRE!

Sun, 10/30/2011 - 23:11 | 1827415 Old. No. 7

I think oil has them spooked.

Sun, 10/30/2011 - 23:17 | 1827420 topcallingtroll

I enjoy these times because we americans get to see our free lunch in action.

We can do just about whatever we want to the dollar and the rest of the world pretty much has to buy em all up. Japan is just open about it, a generally honest society. But the export economies of the world have to support us and subsidize us openly or not so openly lest we quit buying their products. Buwahahaha! Your profits are belong to us! We take them from you by depreciating the dollar. What? You dont like it? Eat shit motherfucker, and I mean that in the most respectful way.

So who really are the dumbphucks in this game? Are you sure it is america?

Sun, 10/30/2011 - 23:21 | 1827422 bob_dabolina

Japan is just open about it, a generally honest society.

Uhm...what? Have you heard of this little thing that happened there called Fukushima Daiichi?

And Ben has been mightly honest about his printing prowess...almost to a fault.

Sun, 10/30/2011 - 23:24 | 1827424 topcallingtroll

Hmm...

Dont annoy me with reality.

Sun, 10/30/2011 - 23:49 | 1827429 Robot Traders M...

http://youtu.be/3tBqdKGiqnI

Sun, 10/30/2011 - 23:42 | 1827461 Mr Lennon Hendrix

But you two (you and Bob) bring up an interesting point-

Japan has been extremely open about their intervention, their using a PPT to buy stocks/commodities on the open market, to intervene in currencie, yet they lie about real issues, like the safety of their people concerning radiation. Is it because they want people to think that intervention is good, nesecary, and that by shining some truth on the status quo they would never lie about radiation?

Sun, 10/30/2011 - 23:46 | 1827471 MFL8240

Long term I am sure it is America and to suguest the Japennese are honest, are you on glue? Did you watch their goverment during the Tzanami? What the fuck man!

Sun, 10/30/2011 - 23:31 | 1827436 Superslam

Makes you wonder if the yenterveners are anticipating the release of some bad data on the fx calendar. Mrs. Watanbe might be back in the game after all.

Sun, 10/30/2011 - 23:36 | 1827445 DoChenRollingBearing

A weaker Yen is good for our bearing business in Peru. So is a weaker dollar..., as long as the Peruvian Sol is stronger than both, we are big winners there. BIG.

Buy bearings, bitchez!

Sun, 10/30/2011 - 23:36 | 1827446 smoked

USD/JPY doce sweet pearl best coca on the block

Sun, 10/30/2011 - 23:43 | 1827460 MFL8240

Last attempt to prop up the junk currency of the world. People will shit their pants when this doesnt hold and the dollars is then taken to the bone yard. The scumbags in DC will blame everyone else as the ship they have been sailing hit and iceberg because the clown in chief is really a Mulsim Jihadist in reality and they were all too stupid to see it.

Sun, 10/30/2011 - 23:43 | 1827466 Mr Lennon Hendrix

I think you are on to something; I doubt Obama has ever read the Koran too.

Sun, 10/30/2011 - 23:43 | 1827463 Quadlet

Now locked up at 79.2? Gold/Silver moves probably MF Global unwind.

Sun, 10/30/2011 - 23:44 | 1827468 Mr Lennon Hendrix

How much of MF's portfolio was in PM? 1.35%? Any guesses?

Mon, 10/31/2011 - 00:24 | 1827550 strannick

0%, though the Interventionists would insinuate its over 100%

Check out the JPY/USD since the great March Yen repatriation, when the Yen first soared. That intervention lasted about 2 months. The next Yen buyback at the start of August lasted about 2 weeks. My amature extrapolation skills says this one should have the Yen fizzling back down to 76 by Wednesday.

Mon, 10/31/2011 - 09:26 | 1828146 MFL8240

Probably nothing because futures contracts on Gold equal nothing in real metal.

Mon, 10/31/2011 - 00:27 | 1827562 dwdollar