May 02, 2024 11:33 GMT
Intervention Patterns Expose New Preference for Illiquid Conditions
JAPAN
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- Markets may be particularly on edge across this Friday (market holiday in Japan) as well as Monday 6th May (market holiday in Japan, South Korea, UK and Ireland) due to the thinner market liquidity and potentially more favourable conditions for the authorities to act on the currency.
- The BoJ’s scale of intervention this week matches that seen across the confirmed USD/JPY selling phases in 2022, with average intervention equating to Y3.6trl of JPY buying, or $23bln at current prices.
- One notable difference in this year’s two confirmed interventions are the very illiquid times of day the Japanese authorities are choosing to hit the market. Monday’s Y5.5trl was bought at 0505BST (1305JST) on a local market holiday (Shōwa Day), and Wednesday’s Y3.5trl bought at 2109BST (0509JST), again while local and international markets were closed.
- This contrasts with 2022’s intervention pattern – in which they bought JPY at 0903BST (1703JST), 1536BST (2336JST) and 1325GMT (2125JST) – during notably liquid times of day, and outside of local or international market holidays.
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