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USD/JPY Slippage Unlikely Driven by Official Intervention

JPY
  • Surge in volumes across JPY futures on that last move in USD/JPY, with ~5,500 contracts trading inside a minute (that's a cash equivalent of around $454mln) to move the price around 45 pips to the downside. Volumes and price action of this magnitude (so far) are not suggestive of intervention - but no confirmation either way. The pair had printed a new daily and cycle high of 151.91 just before the move.
  • Not the first time we've seen ~50 pip corrections lower in USD/JPY on the recent uptrend - happened a handful of times across October, which raised speculation that the Japanese authorities were intervening.
  • Today's volume spike on the move was actually considerably smaller relative to similar spikes in JPY on Oct26 (~10k contracts) and Oct17 (just over 20k contracts). The Bank of Japan confirmed at the end of October that no FX intervention had taken place across the month-ending Oct27 in its official FX reserves data (next released on Nov30), so today's smaller move likely more of the same.
  • While Suzuki reiterated earlier today that Japan will act "with urgency" on FX, recall Kanda confirmed back on Oct19 that "it's more normal not to confirm FX intervention".
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