2012 Japanese Yen Intervention Looming As Azumi Warns Speculators
The dollar has consolidated close to three-month lows against the Japanese Yen during the Asian session on Tuesday and talk of a Japanese Yen Intervention intervention is once again a hot topic. Jun Azumi, Finance Minister of Japan has cautioned towards the development in the strength of the Japanese yen and promised to adopt firm steps in opposition to excessive volatility and speculative movements in the Forex market. Azumi has spoken at a news conference following a recent cabinet meeting and said that he has hope that any positive developments in the euro-zone will help stabilize markets
The U.S. dollar is trading around 76.36 yen, and is moving closer to the all-time low near 75.31 which was put in place on 31/10/11 as the Japanese authorities made a currency market intervention in order to cap the yen’s ongoing strength. The strong downside move started in the overlap somewhere between the European and U.S. session, as traders pushed the USDJPY pair into intervention territory.
The Greek PSI is the main point of interest pre NFP which comes later this week. With this in mind the markets are trading in a broad based risk aversion environment at present.
From a technical perspective the Japanese Yen has been trading in a clearly defined range between around 78.27 and 76.55 recently. The daily close below the range lows is a bearish signal for USDJPY but will have many speculative traders looking to catch a move higher if the Japanese authorities intervene.
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[...] that is one the radar of many traders right now is whether the japanese will intervene on the currency markets. The USDJPY chart below shows how price is moving closer to the all time lows. Jun Azumi, the [...]
It’s difficult to take warnings from Japanese Finance Minister Azumi and Bank of Japan Governor Shirakawa seriously but there are two reasons to think that the Bank of Japan, after instructions gained from the Ministry of Finance, will be more aggressive than ever about stopping the yen from rising than it was before. These are Japanese trade and Japanese deflation.