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

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