INSTANT Yen briefly jumps, sparking suspicions of Japan intervention
Adds comments
July 12 (Reuters) - The yen jumped briefly against the dollar on Friday, putting traders on alert for signs of fresh intervention by Japanese authorities, who likely stepped in the previous day to prop up a currency still close to its lowest in 38 years.
The dollar fell as much as 1% to a one-month low of 157.30 yen JPY=EBS, but pared some of those losses to trade down 0.35% at 158.28 yen. The euro EURJPY=EBS was last down 0.1% at 172.4 yen.
COMMENTS:
JOHN VELIS, FX AND MACRO STRATEGIST, BNY MELLON, NEW YORK
“It certainly looks like intervention, although similar to yesterday, it appears this won’t materially strengthen the currency. It probably is clearing out some speculative positions, but for a lasting yen recovery, I think we need to see the BoJ raise rates and probably end QE, something that could happen as early as the July 31 meeting.”
HELEN GIVEN, FX TRADER, MONEX USA, WASHINGTON DC
"I do think there's a good chance the Bank of Japan intervened again this morning, yes - any outsized move like that that's not in conjunction with movements of the rest of the G10 is going to draw some eyeballs."
"If their previous strategies are any indication, this would be an interesting kind of extension. BoJ has moved, in the last round of interventions, on data points that have prompted dollar weakness and looked to extend the move. If today's move was an intervention, it looks like the BoJ has expanded their thinking a little bit - taking a data release that did not have the dollar-positive reaction it might have and capitalizing off that instead."
STEVEN ENGLANDER, HEAD, GLOBAL G10 FX RESEARCH AND NORTH AMERICA MACRO STRATEGY, STANDARD CHARTERED BANK, NEW YORK
"There is some speculation that it might have been intervention. The price action is consistent with that. But that's not certain. It could also be stops. But if they intervened yesterday, it makes it likely that they intervened today. And I think it's good strategy to keep the market off balance. It's not a bad idea to keep intervention random and more frequent, again, to keep the market off balance."
CHRIS SCICLUNA, HEAD OF ECONOMIC RESEARCH AT DAIWA CAPITAL MARKETS, LONDON
"It could be a modest further round of intervention. I wouldn't be as confident as yesterday when the move was much bigger."
"Given that we have the Japan holiday on Monday, it's not a bad time for them (Japanese authorities) to enforce the move."
"It's not the greatest of shifts of the yen so far, so I wouldn't be overly confident that it's them."
KENNETH BROUX, HEAD OF CORPORATE RESEARCH FX AND RATES SOCIETE GENERALE LONDON
"It wouldn't surprise me if it were the BOJ, going for a 1-2 punch strategy. Liquidity probably isn't great so is a good time, and (Fed Chair) Jerome Powell's speech on Monday could help things along. It is also at interesting levels - the 50 day moving average is 157.75, and from recent a history a close below tends to break down towards the 200 day moving average."
JAMES MALCOLM, HEAD OF FX STRATEGY, UBS, LONDON
“They need to change tactics to keep the market on its toes and show they are serious. Looks like yesterday didn’t cost them much. So this may ensure we close the week near the lows, which will put further technical pressure on the (dollar-yen) cross.”
“They get more bang for their buck also by acting when the Fed is being repriced.”
(Compiled by the Global Finance & Markets Team)
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