Plaza Accord II? After The Coordinated Global Yen Intervention, What Happens Next

Just after noon on Friday, while many in the investing world were still scratching their heads in puzzled frustration over the sharp move higher in the yen, we were first to explain that the sharp move was the result of something the US had not done since the Fukushima disaster in 2011: per market rumors first publicized by Spectra Markets, in response to a request by the Japanese Ministry of Finance (which in turn was conveying Bank of Japan instructions), the US Treasury asked the NY Fed to conduct a rate check (traditionally a harbinger of imminent central bank intervention in a given currency) for the USDJPY, a highly unusual move which is "USD bearish" (and yes, for those confused, the chain of communication was BOJ -> MOF -> US Treasury - NY Fed).

For a more detailed timeline of what happened, below we share notes from Spectra's Brent Donnelly, who was first to bring attention to this historic rate check.