Yen Intervention FAIL

Quick update on how the BOJ interventions are doing to weaken the Yen.

Uh, not good…

Recall my post about the only practical strategy to trade the currency wars, as I saw it.

So what does all this mean for traders?  First off, you can probably be long Yen, because Japan is historically the worst when it comes to intervention.  Lost decade anyone?  The BOJ even telegraphed to traders that it was safe to be long Yen going into the G7 meeting because they would be explaining the reasons for intervention at the G7 meeting.  Most are guessing that there won’t be future interventions until they have explained themselves completely, leaving Yen to appreciate in the mean time.

The BOJ intervention FAIL is only half of the story.  The USD is being depreciated far too fast for any intervention the BOJ can muster.  Let this be a warning to all would-be currency manipulators: you can’t out-QE the master.

Further reading:

BOJ September 15 currency intervention.

BOJ October 5 ZIRP & asset purchase program.

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