USD/JPY was sold off in the Tokyo morning to lows under 155.50. There were no fresh obvious catalysts to trigger the moves, although we did have trade data for June published (not generally a market-mover). The drop was attributed to an underlying fear of further Bank of Japan intervention, the potential for a rate hike at the July meeting or at least larger trimming of bond buys than is expected, and a run on stops under the round number 156.00. There was some talk of intervention but volumes remained light, arguing against intervention. I also noted that an intervention effort would seem to be not the way the BOJ is operating right now:

  • the BoJ recently slammed yen crosses after US data, at a time when USD/JPY was already falling
  • the BoJ tends not to intervene in times of deep and thick liquidity, like with Tokyo markets fully operating

From Australia today we had the latest employment report. It was another solid report, jobs added were more than double the central estimate. The unemployment rate ticked up by 0.1%, with an increase in participation also. The jobless rate remains not too far from five-decade lows. AUD/USD popped a few points higher after the data and managed to sustain the small rise as I post.

Apart from the yen major FX was subdued.

usdyen wrap chart 18 July 2024 2