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Chronology
US Treasury bought yen in July; Fed made no solo FX interventions in Q3
Reduced historical snapshot. The full archived contents could not be verified.
US Treasury bought yen in July; Fed made no solo FX interventions in Q3
Reduced historical snapshot. The full archived contents could not be verified.
Japan’s Mimura reminds markets of intervention risks as yen nears 160
Reduced historical snapshot. The full archived contents could not be verified.
Japan’s FX Chief Warns Not To Forget Summer Intervention
Japan’s currency chief warned that it was too soon to forget the events of this summer after the yen weakened sharply in recent days, signaling that authorities stand ready to intervene again to support the Asian currency.
Reduced historical snapshot. The full archived contents could not be verified.
Reporting
- US Treasury bought yen in July; Fed made no solo FX interventions in Q3
- Yen nears key ¥160 level after U.S. inflation data, sparking intervention risk
The prospect of tightening by the U.S. Federal Reserve risks widening the U.S.-Japan rate differential and adding to downward pressure on the yen.
- Japan Spent Record $50 Billion in Single Day to Bolster Yen
Japan spent a record $50 billion in one day during July to prop up the yen, underscoring an aggressive intervention campaign that included rare joint action with the U.S.
- Japan’s Mimura reminds markets of intervention risks as yen nears 160
- Japan’s FX Chief Warns Not To Forget Summer Intervention
Japan’s currency chief warned that it was too soon to forget the events of this summer after the yen weakened sharply in recent days, signaling that authorities stand ready to intervene again to support the Asian currency.
Analysis
- Japan wholesale inflation speeds up to 7.1%, beating forecasts and firming BoJ hike bets
The upside surprise adds to the case for a Bank of Japan hike in December. It should give the yen some support at the margin, although a Fed that is also on a hiking path after a hot US CPI limits how much the rate gap narrows. Oil is the key swing factor, because crude and fuel imports drove most of October’s import price jump. Any further rise in energy prices tied to the Iran war would feed directly into Japan’s pipeline inflation and strengthen the hawks’ argument. For Japanese government bonds, a firmer inflation backdrop keeps upward pressure on yields. For equities, rising input costs are a risk to margins for manufacturers that cannot pass them on. --- Cheap rice is masking it, but energy, materials and a weak yen are pushing Japan’s pipeline inflation higher again, and that leaves little reason for the BoJ to wait. Summary: Japan’s corporate goods price index rose 7.1% y/y in Oc
- UBS sees limited support for a 50bp Fed hike in December despite hot October CPI
With futures pricing slightly more than a full quarter-point hike for December, the 50bp debate is now a tail risk the market will react to on any Fed speaker headline. Treasury yields close to 5% keep the dollar supported, including against the yen ahead of the Bank of Japan’s own expected December hike, which leaves the US-Japan rate gap a key driver of USD/JPY. Higher real yields are also a headwind for gold, which has tended to trade on Fed hike expectations rather than as a safe haven this year. For equities, the combination of firmer inflation and rising long-end yields adds pressure to richly valued tech shares, which are already dealing with the Nvidia leadership shock. --- October’s inflation report makes a December Fed hike look all but certain, and UBS thinks the real risk is a faster run of quarter-point moves rather than one big step. Summary: US October CPI rose 0.4% m/m (f
Earlier on MacroDigest
- Yen nears key ¥160 level after U.S. inflation data, sparking intervention risk
- Japan’s Mimura says markets shouldn’t forget intervention risks as yen nears 160
- Japan’s FX Chief Warns Not To Forget Summer Intervention
- Japan’s FX Chief Warns Not To Forget Summer Intervention
- Japan Spent Record $50 Billion in Single Day to Bolster Yen
- Japan Spent Record $50 Billion in Single Day to Bolster Yen
- Japan Spent Record $50 Billion in Single Day to Bolster Yen
- Japan revives spending review as high JGB yields sharpen focus on funding pledges
- Japan reboots DOGE-style spending review to fund Takaichi pledges as JGB yields climb
- US confirmed its July yen-support operation used Treasury rather than Federal Reserve funds
- US confirms Japan yen intervention used Treasury funds rather than Fed resources
- US confirms Treasury-funded joint intervention with Japan supported the yen
- US confirms Treasury-backed joint intervention to support the yen
- US confirms Treasury, not Fed, funded the late-July yen-support intervention
- US confirms Treasury, not Fed, funded joint yen-support intervention
- US confirms Treasury, not Fed, funded July yen-support intervention
- US confirms Treasury, not Fed, funded joint late-July yen intervention
- Yen Intervention Risk Re-Emerges as 160 Per Dollar Level Nears
- Yen Intervention Risk Re-Emerges as 160 Per Dollar Level Nears
- Japanese Yen softens on BoJ's lack of hawkish guidance, potential intervention eyed