USD/JPY Discussion

EurJpy Break the Daily Trendlines and Daily Measure Support

Gonna be offline for at least the next 3 months, going out and see the world ;-)

Good luck to all !

DOLLAR-YEN: Societe General strategists note that the MOF "is in a
bind" currently. Asking the BOJ to intervene ahead of the Summit could
have "cost them dearly in accumulated reserves." If there is a positive
outcome, dollar-yen may press higher, buoyed by newfound cross demand.
"In terms of positioning, Japanese retail is short yen, spot traders are
now long, while vol traders are hedging against a break of the Y75.50
support to break barriers down to Y74.50," the strategists say. They
remind that typically intervention prompts dollar-yen to pop 2 or 3 big
figures, but the run-up rarrly lasts. "The odds are that the MOF (asks
the BOJ to intervene) will make its move tonight, as it becomes
operationally more difficult in the NY time zone," Soc Gen says.

Just opened short positions in U/J at 76.04 at high risk (with just +10 pips SL) for 20-30 pips overnight. Today is the first time i hv opened short in this pair.. Let's see if my luck works...

It probably won't.
- s/l is too close,
- it's not a good level to short
- it's the wrong time of the day

why not small position,for buy with tp like 200-300pips,the r:r is so huge now and yet many people go into risking with huge positions for so little.I myself have opened micro position for long at 76.80 and another one is awaiting to be opened at 75,and all of them with SL at 69 :] in case of a spike.

I don't have that much of patience specially in case of U/J. I just traded with 1.00 volume (around $100 loss - 10 pips) with targeting quick 20-30 pips (around $200-300). The main reason for me entering short at this point is due to tmrw's crucial data releases and overnight i am expecting this pair to fall ...

Simple logic for me in U/J keeping in view current trend line is:
Day time loose = Overnight Gain and vice versa

bye bye $100 i suppose? its going up for a bit now... i have longs at 76.50 but only for intervention use only, if it goes slowly up like this, i'll remove them and wait for a better time

Stop Loss HIT.. $118.75 gone....

UJ need closer a bit higher During pra Tokyo Open in order to calming Jap authority and prepare another attack when Tokyo Closed

If you don't have much patience, then don't trade UJ
I have a nice approach with UJ

As long as it is trading near all time lows, there is just one way to always make gain trading this pair: that is going long at the right price without s/l
and a target of 250 pips.Then set it, forget it, look every now and then if you are in gain, and just in case, you're also covered for a possible intervention.
At this moment every entry below 76 is guaranteed profit if you play like this

lol, your 8 lots long looks profitable now, huh?

Guys, any concrete data on the BOJ intervention (when & how much)? I'm gonna short UJ and still looking for good entry point.

Hold on.....I'll just ring up Azumi and ask him for ya

That's so kind of you, would you please?

Just kidding What's your view on the pair? I'm thinking short short term and long long term.

Not sure that is a good risk to reward strategy, given the high likelihood that BoJ is very likely to intervene in the next days, based on the rhetoric level they are putting out, and from multiple sources. (I say that because the downside potential to shorting UJ is quite limited, and more safely attained with other pairs.)

When? They don't make it that easy - there will never be any preannouncement. The best you get is frequent rhetoric like we are seeing on the wires now. Instead, the first sign is a pretty much standard 100 pip pop for no reason. Then, a slight 20-30 pip pullback. But, when I say 100 pips, it is instantaneous, ie., less than 2 seconds. In otherwords, by the time you can adjust your chart, it's off it already, assuming your platform has kept up, technically. Then, you might get a 20-30 pip pullback, and a possible entry. BUT, there is a danger of speculative pops and overall trickery by dealers and other speculators. These false pops might look like intervention with a 100 pip pop, but then just a slow (minutes) or quick (seconds) fall back to where it started - you do not want to be caught long in that either. And, given it is the pre 9pm NY time that the last 3 BoJ interventions have started at, liquidity is poor, so fake pops are possible, ie., it is easier to manipulate and swing moves around with fake bids, etc.

How much? Nobody knows. The last 'coordinated' intervention - right after the yen huge move during post-5pm NY low liquidy period (it moved down around 300+ pips) occured days after that move, and was on the heels of Japan's earthquake. Given there was a lot of world/G7 sympathy, it was a coordinated intervention, where, BoJ/Kampo sold yen a number of times during Asia, and then other banks did so pre and during London, and then during NY as well. It was around 300 pips in UJ overall. Coordinated or not, this is the average move. Note, that the other yens have just as much and usually more likelihood of moving - I recall GBPJPY moving 400+ pips in previous interventions.

That last post-earthquake intervention was deemed to have seen $50B spent by Japan. Reports in the past few days have placed the BoJ fund for these interventions at having $450B in the 'account', although they would not be expected to use anywhere close to that amount. Previous interventions where BoJ has gone it alone, saw them use an estimated $20B, during which a 300+ pip UJ move and the GBPJPY 400+ pip moves were achieved, over a 18hr period..

So, in terms of timing nobody knows; speculation is that they are waiting for some sort of finality to be out from the EU mess; certainly, as we speak, the powerbrokers there are meeting into 3am local time to hammer out something substantial. My estimate is that BoJ might act during tomorrow's Asia session. You will note that as it gets to 9pm NY time, UJ start moving upwards, as (we assume) others are buying to get onboard the train. As time goes one, towards 10PM NY time, it is likely to fall back. Whether or not BoJ intervenes if the fallback is 'too big' nobody knows; certainly, there's some evidence they (and Kampo, their quasi-gov't emissary) are defending 75.7 and 75.5. For those who are gutsy, these are reasonable places to place buys, if it falls back there.

If USDJPY does keep moving up, ie., once past 150/200 pips, BoJ will either deny or sometimes even confirm they have intervened, which, by that point will be obvious. The yens will move up in a rather structured textbook fashion, where, on a 5M chart you should be able to see resistance causing pullback, and then that turns into support. That, and trendlines and trend channels will be your best friend for long entries.

I have traded through 3 interventions, and they can be immensely profitable. But, this one is fraught with complications, given the euro-solution that is underway, coupled with the weakest USD in decades - lots of forces pulling the yen pairs around make it tricky. Also note that xxxUSD, including EURUSD during previous interventions, have seen a 100 pip down move the instant the yen gets sold; it does tent to recover. Trade carefully.

Long term this pair will head up over 100......but until the spotlight comes off the EU mess and the USA debt issue, I don't see a bull trend materialising as very likely.

The short term?.......well....as I've said a few times now, there is higher probability trades available on just about any other FX pair that you care to mention. For that reason, the short term for this pair is not worth considering.

I was looking to refresh myself on the last few interventions by BoJ/Kampo; I have posted links to somewhat detailed posts around the events and/or expectations, citing the sources. (You can look search via my ID for the word 'intervention' - FF is great for finding historical stuff.)

Here are some of the more useful posts, for newcoming fx traders:

- Kathy Lien supplied details on previous BoJ interventions
- info on BoJ intervention procedures, as well as 2 good external source info links
- link to Ashraf Laidi video with BoJ intervention context (Spanish newscaster, Ashraf answers in English)
- Chart with early Oct 2010 intervention, and it's failure/return to highs
- some September 2010 intervention details
- Some more details on largely final results of the September 2010 intervention; was hoping I posted a graph here, but I did not want to state the obvious; I think there's a chart of a yen pair somewhere around this timeframe though.

Just thought I'd post/search these in case anyone felt they wanted to get up to speed on intervention landscaping.

I'm willing to make a bet that there may possibly be some sort of form of indirect monetary process, the extent of which is somewhat larger than nothing but less than something, by the Bank of Japan to help support the currency against the artificial whims and influence of speculators.*


* I may or may not be joking