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.