Increased focus on ‘currency wars’ might deter BOJ

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Finance ministers from the G7 nations will hold an informal meeting this week and the Japanese FinMin Noda has already stated that FX may well be on the agenda.

The so-called “currency wars” have been getting an increasing amount of air time in recent days and this will make it much more difficult for the BOJ to justify any more unilateral intervention to its other major counterparts.

The fact that they didn’t enter the market yesterday when they had the chance after the monetary easing tells me that they are nervous about upsetting the US in particular. The market will surely test the BOJ resolve at 82.85 before the day is out.


All|Asia Pacific


Sean Lee


  1. Printing money, talking it down, intervening … is there really any difference? Come on BoJ – make war! That’s what the war chest is for!

  2. calling it a “currency war” is a great way to muster up readers but the days of war between developed countries are really a thing of the past. Call it currency negotiations and leave it at that. Negotiations can get heated enough as it is without the media needing to fan the flames of war.

  3. Can we include the United States too, this QE 2 and POMO action of them makes us just as guilty in the Wars.

  4. Agree with Trading_Nymph. As very obviously, almost all currencies are at recent extremes against the USD…i guess if US Fed wants to point the finger at the biggest currency manipulator party at the moment (either directly, indirectly, intentionally or out of intention…), they should be pointing at themselves. How can they tell other countries to not devaluating their currency, while US is doing exactly the same? It’s like saying…hey people, you may not rob a bank…i will punish you since it’s a crime, but even so, i am allowed to rob any bank i want. That’s hypocrisy at its best.
    I still don’t understand BoJ’s absence of direct money pour yesterday after the intervention. Easily gone past 85.5 from almost 84 if US did not counter directly by the end of the day. I’m sorry, but boggles me…don’t they want it back around 89-90 as set by Tankan’s last meeting? Japan, be brave…kamikaze!!!

  5. US : EU and CHINA = – USD
    formula is simple and they like it all hehe

  6. @kanov: could be many reasons for the boj lack of action. Unlike us traders who only have to think of this trade, they have to consider the bigger picture, domestic politics, international relations, long term strategic implications, etc. Could be (it appears like that from their media quotes) that they are defering to the US, as the US is their best ally in the world. Maybe BB told them, for US domestic political reasons he/Obama needs a weak dollar for the next few weeks, and after that he will ensure that the dollar strengthens again,…. etc etc. Could be any reason. That’s why I say, skip the words, just see the price action. Actions speak loud and clear and that should be enough for us traders. Cheers and good luck.

  7. @ Pandu…yes, that’s possible…if in case the BoJ intervenes here…is it safer to go along with them using chf/jpy or eur/jpy rather than usd/jpy considering the usd is still going to weaken? I still have one long position up there at 86, stuck…i only want to get out…

  8. @kanov: if BoJ intervene, the best pair will be UJ and next EJ. Definitely not CHF/JPY – they are both safe currencies, tend to move together. If you can stick it out you stick it out, the UJ may go lower first. Once it turns, don’t get out as soon as it reaches your level – if it goes upto 86, it will mean a change of trend and likely mover further up.But you gotta watch it, if it stalls near 85 and looks like reversing, take the chance to get out. Good luck.

  9. Oh Dear… You people are still waiting for BOJ. They will not do anything unless Yen falls below 82.


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