USD/JPY, at Y78.16, hold just about dead-center of the day’s range after seeing a nasty spike higher shortly after the morning US data that shows dismal jobs growth in the US economy. Dollar was driven higher by talk that the BOJ may have “checked rates,” seen as a signal of displeasure with prevailing yen trends, but those with a few years in the market know that USD/JPY would have spiked more than one yen if actual intervention had taken place. Traders recall that past dollar interventions by Japanese authorities have caused spikes of 2 or three yen in the exchange rate and, given the size of past interventions, around $100 bn in one day, a three to five yen movement on the day could be easily imagined if such reserves had been deployed today. Japanese accounts were seen as large EUR/JPY buyers on the day but that could just be prudent position trimming given the heightened
intervention risk that will peak with the start of next week.
EasyForexNews Research Team