Japan Intervenes – Finally
No surprise they intervened, only the scale of the exchange rate move is somewhat surprising to me. Nice candle.
Yen strengthening was the result of China increasing its portion of foreign currency reserves held in Japanese Yen, probably attempting to soften U.S. anger over China exchange rate policy by causing problems elsewhere.
The world of competitive debasement continues, probably with increased intensity; they will probably have to repeat this couple of times if they want it to work. Broader market impact will probably be further reduced confidence in fiat currencies round the globe.
Chart 1. Japanese Yen – United States Dollar Exchange Rate
Source: Bloomberg