"Easy come, easy go, when the market is GETCO"
That should be the motto of every momentum trader who decided on Friday to buy the USDJPY just because it was 2pm, and then, when 3:30 pm came around, and the momentum chasing algos woke up, then pat themselves on the back for a "job well done." Because in early trading, before even the Japan open, the USDJPY, following on comments by Japan's econ minister Amari, as noted here earlier, that the days of easy JPY devaluation are over [6], collapsed by over 120 pips from a closing print of 103.20, and tumbled in a span of second to just under 102, taking out all 102 stops, before the GETCO plunge protection algo team took over and sent the pair back up, however briefly.
[7]
Of course, Japan has yet to wake up and read the comments from Amari. At that point should the Mrs Watanabe retreat bugle sound, all bets are off, and just as the momentum was so instrumental in sending the USDJPY over 103, so it may push the pair in double digit territory in almost no time. As for JGB vol and the dreaded VaR storm, well: good luck to Japanese banks which may be nursing up to JPY10 trillion in capital losses soon.