Japan Intervenes In FX Markets... Again; Hilarity Ensues

Tyler Durden's picture

Minutes ago we saw the following headlines flash, describing Japan's latest attempt to kill the Yen, following the earlier already failed attempt by Moody's which while probably being paid well for its downgrade of Japan, did not achieve its true purpose - to weaken the Yen:

  • MOF: Will Require Banks To Report FX Trading Positions - a nice little appetized to FX capital controls...
  • Fin Min Noda: Will Set Up Maximum $100B Facility To Deal With Yen Rise - yet another attempt at central planning of FX crosses
  • MOF: Will Strengthen Monitoring Of Currency Markets - Noda will be watching... even more

What is highly entertaining, is that as Bloomberg's Michael McDonough shows, going forward we will need to measure the halflife of Japanese intervention not in days, not in hours, not even in minutes, but in actual ticks. Note: Japan wants this chart to go up.... not down.


Another amusing outcome: we now have the latest FX major: the USDJPYLOL

And for those who actually care, Bloomberg has the skinny on this latest act of utter desperation:

  • Says Japan continues to see one-sided movements in currency market and government is ready to take bold actions if necessary
  • Says traders will be required to disclose their forex positions, and this disclosure will be compulsory through September
  • Says government hasn’t decided on any action against excessive FX positions
  • Yen swings between gains and losses vs dollar, rising to as high as 76.59 after earlier falling to as low as 76.87

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mfoste1's picture

govt need to stay out of the markets.....

So Close's picture

Animal Spirits... meet alien invaders.  Bullish.

glenlloyd's picture

they won't get out till they've killed it, and the fight will be like nothing we've seen before

slow_roast's picture

Stuck between a rock and a hard place.  


Sounds like a Japanese fetish video.

tmosley's picture

They're trying, but they can't shove any more in.

That is among the many incarnations of the Keynesian Endpoint.

Drag Racer's picture

Stuck between cesium and strontium. 

fixed it for ya....

JLee2027's picture

ZH Bug......

I still can't select the PLUS (Green) or MINUS (Red) messages when they include a reply in italics. Anybody else?


DormRoom's picture

Japan's economy must be hurting more than what has been reported for the BOJ to intervene so frequently.  Enter wolfpack.

LetThemEatRand's picture

Another conspiracy theory I suppose.  Breaking from CNBC -- this is bullish for BAC, which is a cheap trade at well below book.  

lolmao500's picture

Well they may be right for once.

Yes, BAC is worthless... but if you factor in the corruption, then it's worth a lot more than 6$ a share...

Let's do the math :

(corruption of the FED) + (corruption in Washington DC) + (bailout mechanism) + (bend over factor of the American people) X (cost of KY) = BAC shares are worth a lot more than 6$...

Blorf's picture

I guess they need to announce a strong Yen policy to send things the other way?

zorba THE GREEK's picture

Like Japan doesn't hold enough worthless fiat U.S. dollars, it has to go out and buy more.

Hey, I'll trade you my roll of Charmin for your roll of Cottonelle. 

brokesville's picture

hey look my new honda glows in the dark

indygo55's picture

I think the batteries will stay half-charged for 150 years too. Its a new feature.

scatterbrains's picture

Are the Japs taking advantage of today's ppt pump to repatriate funds back home and buying gold with the proceeds ?

chartcruzer's picture

Was talking with a older friend last night who was savvy on the markets. He's in shock with the combination of record low interest rates, stock market declines, high inflation, and rocketing PM. He simply does not know what to think/do other than stuff money under his mattress as he refuses to believe pm is money. When the broader population of investing sheeple figure out that there is no way to do anything but loose money (in real terms) using conventional investing techniques all hell is going to break loose on planet washington. With the EU and US economies having chronic fatigue syndrome the financial markets could soon resemble an epileptic seizure. going to invest 100% of the portfolios very soon - short on equities, long on PM, long on Ag, and long a few safe currencies. Time to sit back and watch the spectacle. The chart says it all...... http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3225058&cmd=...[s238082247]&disp=P

reader2010's picture

Just tell your finanical "savvy" friend that Mark Twain once famously said, "It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so."

dwdollar's picture

Don't underestimate the stupidity of people.  My wife is constantly rolling baby boomers into CDs at <1%.  The very same credit union has a speciality checking account (to get people in the door) at 2.96%!  WTF?  You're going to lock your money up for 6 months when you can get over twice the interest with no strings attached?  Baby boomers are f'king retarded with money.  They don't deserve the wealth they have.  Period.

Oh regional Indian's picture

Hope your wife isn't reading this dw, for the implications are quite clear even for the slower ones here! ;-)

On Japan, I can tell  you first hand, even now, except Fuku and locale, people (liek my old partners in Kyoto) still believe it's just a blip, a glitch, all will be well. Especially NOW, with change in leadership etc. Quite sad actually. 

Japan is really caught between the US (which is it's effective controller) and itself (since NOTHING the US has done there since WWII has been to ANY benefit of the populace at large).

Sayonara to Japan as we know it, hopefully for ever. I hope they rediscover their essence, so maligned by the ugly hand of the US controllerate.



slewie the pi-rat's picture

i know!  it's kinda japanese, methinks, Vi-ndianOh

i have two japanese friends, who just dont want to talk abt it

the lady i was talking with last saturday has family in or near tokyo;  one of the samurai clans;  so, i asked her how her parents were:  oh, they're fine;  no.  no problem!  they're fine

i don't know what they believe, ORI, but that is sure what they say, alright!

they'll talk about dogs, flowers, food, plants and gardens, being widowed, their kids, but not about that.  ain't gonna happen

gwar5's picture

Send him this:  321gold: Gold and Economic Freedom by Alan Greenspan 1966


And send him this, for how it ends: Fiat Currency Failure: John Law | Rapid Trends - Gold and Silver Bullion


The last paragraphs of Greenspan's are nutshell: Here's the last two below. People don't realize what money really is, and isn't.

"In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.

This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard."

Alan Greenspan
[written in 1966]


DefiantSurf's picture

 and now the same guy goes on national tv and tells everyone "we will not default, we can print money" ?

Apparently his views changed over the years....


GuyJeans's picture
  • Says traders will be required to disclose their forex positions, and this disclosure will be compulsory through September


How is this helpful?  Is this so the BOJ can front run/stop out etc  Ms Watanabe?

Rick64's picture

Yes what is their reasoning for this? It looks like a scare tactic. Crush the traders that are long the yen?

Seasmoke's picture

to infinity and beYENd

hedgehogging's picture

Does Mrs Watanabe need to report to MOF as well??? Tsk! Tsk!

Johnny Yuma's picture

And pop goes the Weasel. 

Ass to Mouth's picture

At least they got bukkake going for them.

Slin's picture

My heart goes out to the Japanese people.  These interventions are showing that you can't even die a slow death.  They push on a string until one day it will go poof.  These interventions and lack of success and terrible debt show how close they are.  Not forgetting it has never done anything for them.  It failed, but worse is the way it is ending..frightening.

hedgehogging's picture

Japanese are very determined people..... I think I can, I  think I can, I  think I can......

lolmao500's picture

I think I can win WW2... till you nuked them.

The keynesians need to be nuked economically till they realize they can't win.

reader2010's picture

better way to put it is they're delusional.

Reese Bobby's picture

Welcome to the "I Heart Japan Club"

-China, Korea, Philippines, Pearl Harbor...

Yen Cross's picture

  Thanks for the reminder to take the 5 pip T/P off my usd/jpy trade.  Range 76- 77.20/40. 

gwar5's picture

FED: Must. all. go. down. together.   Bernanke's going to get some nasty hemorrhoids straining this hard -- look away!


Now, here's a country that got EQ'd, tidal waved, melted down with hot plutonium, has a 200% debt to GDP and just got downgraded (!), and they cannot seem to knock it's currency down against the USD, no matter what they do, I guess because the dollar is perceived to be that much worse. What does that say about the poor Benjamins?

Speaking of conspiracies lately --- wonder what the Fed has in store for gold when it's the last safe haven?



Divine Wind's picture

"wonder what the Fed has in store for gold when it's the last safe haven?"

I am of the general belief that there is not enough physical gold being held by the general public to make it worth trying to confiscate.

The piles supposedly held by the various funds...., now that is a different story.

Be that as it may, as a friend is fond of saying;

"If they come for my gold, they will only leave with lead."

chump666's picture

Asian markets are looking very broken.  Should be rallying.

Yen Cross's picture

  Japan is running the { TWIST> ... Spillover>...

Captain Benny's picture

Oh no! My FX position will be known by more than the people that already know and monitor my trades!  Sorry, but you cannot punish FX trading.  The nature of open currencies is such that you've got to pay up with "intervention" costs if you want to make a difference.

The BOJ has a lot of currency devaluation work ahead of it if it thinks it can devalue with the big boys: USD and EUR

LoneStarHog's picture

Hey, Japanese people, round up all of those banker losers and move their office to the middle of Fukushima.

chump666's picture

Hedge Funds are crunching risk trades, hence the YEN being bid on crosses.

Rumor: outta NY on the close the BAC takeover via JPmorgan. 

Yen Cross's picture

Moron ! The yen is always bid on crosses! Risk?

Nage42's picture

People's Bank of China filling in the Japanese form for: "What is your intended position in Yen?"

Chinese trader 1: "Boss, form only have 12 blank spots for number, what I do?"

Chinese desk head: "You just put in tree retters 'Eh eru eru'  Be a man!"


Cold day in hell when China allows for a weak Yen to open the door for manufacturing capacity to repatriate back to Nippon.  Who's pulling the strings you may ask?  Who would benefit from a strong Yen? (psst: the people who get the work offshore'd and then have another lever to play with in the FX peg).