- The MOF asked the BOJ to intervene in USD/JPY at 10:30 Tokyo time
- USD/JPY gapped from 83.00 to 83.70 when more intervention was spotted
- The Nikkei reversed from -0.5% to +3% after the BoJ moves
- The USD made strong gains against regional Asian currencies also
- Chinese officials again reiterate that large surplus has nothing to do with Yuan value
- Asian business sentiment slips in latest quarter
- Chinese FDI +18% YoY
It’s been all about the JPY. USD/JPY managed to post a marginal new low at 82.88 when FinMin Noda announced a press briefing and USD/JPY gapped 70 pips higher. Buying by the BOJ has since been confirmed and they have returned to the market on at least two occasions since although we have no exact confirmation on how much they bought. Pullbacks have been limited to 25/30 pips on each occasion and the BoJ seems to have successfully caught the market short and off-guard. Ranges: USD/JPY 82.88/84.96, EUR/JPY 107.75/110.07
The other majors have been quiet when compared with the JPY. The USD has benefitted from the intervention but EUR/JPY buying has also underpinned the EUR. EUR/USD closed in NY at 1.2990 and will open in Europe slightly weaker after a 1.2956/1.3022 range.
EUR/GBP finishes the session unchanged after a .8358/83 range and cable saw 1.5482/1.5555
The AUD has lost a bit of ground in line with all Asian currencies but has benefitted from some heavy AUD/JPY short-covering as well. Ranges: AUD/USD .9358/.9428, AUD/JPY 78.00/79.55
Markets: Nikkei +3%, Sydney +0.5%, HK and Seoul flat. Gold $1270/oz, Brent crude $79/bbl.
