Unsurprising that the nerves are jangling
Talk of the BOJ doing a ring-around
Here we go with the intervention stuff. For those that don't know the drill, the BOJ like to pick up the phone to banks just to ask the rate. That's usually enough to have the market covering for fear of real intervention.
It's a ploy used by many CB's in similar circumstances. It's going to place some increased focus on the weekend and the early Asia open on Monday.
In Feb we had intervention talk flying around and I wrote in a post;
The chatter has grown about BOJ intervention and it's all been overblown as usual. The BOJ are not going to step in to stop moves of a few hundred pips. Before today I would have said that there's no way they would step in, even given the drop since the Fed hike. They're not that short-termist. Most major central banks aren't. Given how far the yen has fallen over the last few years they will be well aware that they might see it rise and they will be prepared to let it go where it wants, within reason.
And that's the big caveat. As long as the FX market is functioning properly and moves aren't excessively volatile then they'll sit on their hands and just jawbone. They are not interested in jumping in to every 200 pip move. The time they will be concerned is when the moves increase in volatility and that's what we're starting to see now. Note, I say "starting to see". For us watching and trading everyday these are volatile moves. But we're mostly made up of traders who trade intraday and so we get caught up in the moment, the adrenalin gets pumping and we see things that are bigger than they are.
If there's one great trait of central banks (the big ones) it's that they don't get caught out by the noise. They don't start pulling their hair out over moves of a few hundred pips."
Here's the post in full;
The ForexLive guide to BOJ intervention - The do's and do not's, the where's, why's and how's