The "Rate Check" And The Yen: Here's How To Trade Coordinated Global Currency Intervention

On Sunday, we shared our thoughts on Friday's yen "rate check" by the NY Fed which sparked the biggest surge in the yen since Liberation Day, as well as how the coordinated efforts to hammer the USD reek of a new Plaza Accord. 

For those who missed it, on Friday we were the first to report that the NY Fed and the Bank of Japan engaged in verbal warnings - including rate checks - signaling verbal potential "action" without actual intervention (i.e. central bank jawboning).  As we discussed, it is very rare for the US Treasury to be intervening in FX markets. The last time it happened was March 2011 (Japanese earthquake) and in September 2000
following the launch of the euro. In both instances the intervention was multilateral and involved co-ordination with G7 partners. In this instance, the (verbal) intervention appears to be confined to a potential bilateral co-ordination with Japan rather than other central banks.