December 20, 2024 03:51 GMT
JPY: Further Verbal Jawboning, USD/JPY Supported Sub 157.00 For Now
JPY
Another round of verbal jawboning has impacted USD/JPY. This time from FX Chief Nimura. They were similar to remarks made by the FinMin earlier:
"*MIMURA: DEEPLY CONCERNED ABOUT FX MOVES" (BBG), "*MIMURA: WILL TAKE APPROPRIATE RESPONSE IF EXCESSIVE FX MOVES"
- USD/JPY fell to 156.84, fresh lows for the session, but is back around 157.00 in latest dealings. Futures activity also rose, but was within recent norms and hasn't seen much follow through.
- As we noted earlier, while USD/JPY is now close to 100pips off earlier highs today, we are still well above pre BoJ levels from yesterday (pre meeting and pre Governor Ueda's press conference).
- Still, today's comments will make the market more wary of intervention, particularly as we approach the Christmas/NY period, where liquidity will be lighter.
- Note we have the Oct BoJ Mins on Dec 24, while Governor Ueda will speak on Christmas day, then the Summary of Opinions from the BoJ Dec meeting will be released on Dec 27th.
- USD/JPY risk reversals have edged down slightly today, but remain close to recent highs.
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