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  • Yellen: Currency Intervention is Acceptable Only in Very Rare and Exceptional Circumstances

South Korean & Japanese told their USA counterparts about their concern about FX stability.

Now a green light on currency intervention from Yellen.

Something will be coming down the pipeline I assume - when is the billion dollar question.
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Quoting Momofrmnyc
South Korean & Japanese told their USA counterparts about their concern about FX stability. Now a green light on currency intervention from Yellen. Something will be coming down the pipeline I assume - when is the billion dollar question.
Selfishly, I hope soon. Then again, just because the Yen goes up doesn't mean everything else is okay too. Equities/USD/other pairs could all react in unexpected ways.

That said, SOOOO much communication has been made about intervention that either A) the powers that be are attempting to soften the ground for whatever happens to avoid a whipsaw, or B) nothing is going to happen at all (markets love to confound).

One would THINK the collaborative efforts of countries these days would mean a smooth transition rather than a massive spike, only time will tell.
Quoting ffghost
{quote} Selfishly, I hope soon. Then again, just because the Yen goes up doesn't mean everything else is okay too. Equities/USD/other pairs could all react in unexpected ways. That said, SOOOO much communication has been made about intervention that either A) the powers that be are attempting to soften the ground for whatever happens to avoid a whipsaw, or B) nothing is going to happen at all (markets love to confound). One would THINK the collaborative efforts of countries these days would mean a smooth transition rather than a massive spike, only...
That's the thing it brings in volatility one way or the other. Either they actually do something about their weakening currencies or they watch it go to heights never seen before. I got burnt in the beginning trying to time the stock markets and saying it has to eventually go down, that was my first lesson in the markets can remain irrational longer than you can remain solvent.

The fact that they voiced and had coordinated discussions amongst their counterparts is bringing me to a more heightened level that they may finally do something.

Let's see.
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Here we go.
If Japan doesn't intervene tomorrow... JPY is completely done and I'm done waiting for it.
Quoting Whatevs
If Japan doesn't intervene tomorrow... JPY is completely done and I'm done waiting for it.
They don't have to intervene tomorrow. All they have to say is that an intervention is coming (not that they necessarily will of course). and the JPY could rally as people lighten up I doubt they would give that type of message without just taking action, but it certainly would scare the kids a bit (considering past language has been "we will watch and see"). That said, a trailing stop on a short protects the big losses and locks in gains. I am sure that type of mentality (through whatever strategy or combination of strategies) is what institutions are implementing in the event that nothing happens near term and the slide continues.

With any other instrument, we'd say "it just broke support, the decline is expected to continue". In this case, however, since a government can (and has, in the past) come in to bolster the instrument, all bets may be off.

An afterthought: I guess you could read Yellen's comments to be "Japan wont intervene because this is not yet an extreme situation" (knowing intervention on the Yen will undoubtedly affect the dollar)
They won't intervene. They have their instructions from Mummy. They will be the obedient children that they are. It must suck for them being told how to behave. Unlike the SNB who is all grown up and makes their own decisions without consulting anyone.

The US wants cheap Yen since is bolsters their profits having vehicles and electronics components made there, shifting away from production in China.
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Quoting Momofrmnyc
South Korean & Japanese told their USA counterparts about their concern about FX stability. Now a green light on currency intervention from Yellen. Something will be coming down the pipeline I assume - when is the billion dollar question.
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  • Story Stats
  • Posted: Apr 25, 2024 10:10am
  • Submitted by:
     Newsstand
    Category: Low Impact Breaking News
    Comments: 10  /  Views: 5,176

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