USD/JPY is down 0.8% on the day now to 161.20 as the dust settles from the earlier price action volatility. The past hour or so saw the currency pair falling by around 100 pips from 162.20 to a low of 161.13, before a quick rebound back to 161.90. After which, it has been a slow dribble lower to current levels as intervention risks are definitely heightened at the moment.
The question is, did Japan intervene this time around? Personally, I’m leaning towards the ‘no’ camp as it wouldn’t make much sense for them to step in especially before a key risk event like the US jobs report.
It would seem that it was the threat of intervention that is leading to some stops being run. Or at least that is the most compelling argument point in my view, with traders also taking some off the top ahead of the non-farm payrolls later. From earlier today: Japan shifts to ambush tactics against yen speculators, sources tell Reuters
If Tokyo officials want to keep traders on their toes in guessing when they might intervene, this is a decent start. But again, they will have to pick their timings well if and when they are then tested to the limit again.
Given their previous intervention effort during the Japanese holiday period, it is reasonable to expect a potential repeat tomorrow with US markets out. That especially with USD/JPY seen near the 2024 highs coming into today.
So, was the above report a timely “leak” to try and deter speculators? Or is it a precursor to what to potentially expect tomorrow on a hot set of US labour market data? We shall see.