Thursday saw a dramatic move as Japan stepped in to defend the yen, intervening after the USDJPY surged to a session high of 160.725. This marked Japan’s first official currency intervention in nearly two years. This move sent the USDJPY down by more than 2.3%. Let’s see how committed the Japanese government is to defending this level.
Before the intervention, investors appeared to have underestimated the risk of such action, holding one of the largest short yen positions in nearly two years, selling the yen against both the euro and the British pound too. Now, we’re seeing a stronger rebound in these crosses compared to the USD/JPY.
It’s also interesting to watch the Japanese cross with gold (BlackBull Markets offers trading on this instrument of course). The dip in gold relative to the yen has been significant, but technical support levels are holding up much stronger than in the currency markets.
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