intervention is coming "Statement of the G7 Finance Ministers and Central Bank Governors We reaffirm our shared interest in a strong and stable international financial system. We are concerned about the recent excessive volatility in the exchange rate of the yen and its possible adverse implications for economic and financial stability. We continue to monitor markets closely, and cooperate as appropriate."
No money backing the talk yet, so the big fast moves to the downside are catching early birds - better have really wide stops and little leverage, or you better wait until it blows off the handles. Difficult Yen trading right now.
Any negative news from Russia, new EU members or 3Q numbers - drives down the Euro still, with the delevering, repatriation and global financial tug-of-war. This rationalization is probably why anyone are wary of putting money behind the support, just sticking to rhetoric - and saying "it will come." So there is a combination of factors, and it seems a little more trading has emerged today so far.
By now, our world monetary leaders need to understand that jawboning is seen as a joke by the markets. You can jawbone when the world isn't experiencing contagion; when we're in deep shit, the leaders need to provide action. That's the test of leadership, and among our central bankers, there's great need of the attribute.
in 98 intervention caused the yen to crash 8 per dollar. in 2003 yen moved 150 pips lower, in 04 it moved 150 pips lower.
The market doesn't seem too bothered by the rhetoric though, time for action! I can't wait to see the CB's around the world co-ordinate intervention, it's going to be like a blank check for traders! I'm contrarian and selling Yen all the way down, if nothing else at least the trade pays interest, and I'm providing a service....in-house liquidity for my bucketshop
You earning intrest on long yen with these kind of volatility levels........whatever you doing you should let the carry traders know, then the yen will rise, volatility will decrease and you will make more money.
Short Yen but yep, earning interest (as long as targets aren't met too quickly, obviously), and capital gain. Volatility is way too high for those carry guys but you're right, it would be great to have them on my side! I believe this is a play on the buy-the-rumor threat of intervention (or maybe even the BOJ going it alone) as well as some intraday profit taking. I'm no economics guru, I'm just trading the odds with wide stops, averaging, and sensible risk and money management....buying or selling, I don't think it makes much difference to be honest, both seem to be making money which I guess goes to show just how unimportant direction really is in trading. ~