ForexLive Asian market wrap: Massive BOJ intervention in USD/JPY

Author: Sean Lee | Category: News
  • BOJ started buying USD/JPY at 10:25 JST
  • They have continued intermittently and are currently buying huge amounts at 79.20
  • Japanese officials blamed speculators for strong Yen and said economic development was being undermined
  • EFSF’s Negling in Tokyo; MOF says will continue to buy EFSF bonds
  • Trichet urges swift implementation of EU summit deal
  • MF Global looking for a buyer
  • Nikkei back in positive territory for day after BOJ actions
  • Gold and Silver fall by nearly 2%

It’s been all about USD/JPY today. Option barriers at 75.50 and stops just below were triggered in early interbank trade taking the pair to a record low at 75.31. Then the BOJ started buying mid-morning, driving the pair from 75.70 to 77.00 immediately, and then accelerating again before it ran into the first batch of heavy selling near 78.60. The rally reached 78.98 but when the BOJ first-phase stopped, USD/JPY fell straight back to 77.75. Phase II kicked in around 78.30, taking the pair to 79.50 almost. Since then, the BOJ has been parked on the bid at 79.20, buying 10s of billions of USD in the process. There has been a quite unbelievable 5 pip range for the last 90 minutes. Ranges: 75.31/79.46, EUR/JPY 106.70/111.52

EUR/USD has fallen as thye USD caught a broad bullish tone from the intervention. It stalled initially near 1.4100 but when stops were triggered below 1.4070, the fall gathered pace. Bids near 1.4030 stalled for a lengthy period but the bears are back in control as the session draws to a close. Ranges: 1.4005/1.4169

The AUD lost ground against the Europeans as well as against the USD. Asian currencies in general fell heavily across the board. Ranges: 1.0519/1.0709

Cable 1.5965/1.6133; USD/CHF .8607/.8728