Japanese intervention to protect USD/ JPY above psychological 100
The Nikkei has published details of Prime Minister Yoshihide Suga's request to officials at Japan's Ministry of Finance not to allow USD/JPY to fall below 100, a request that was confirmed by a number of sources.
"Make sure the yen-dollar exchange rate does not cross the 100 yen mark."
Market implication
Central bank intervention is a dangerous path to tread, just ask the Bank of England, for the market is far larger than any central bank.
However, it is a ling in the sand now for the market to be aware of and the psychology is that the market knows there will be a big buyer below 100.00 to target.
Going back as far as Sep 96, the market has rarely sustained an offer below 100 for a significant period of time until 2008 which lasted a number years until 2014.
Then, the last time the price fell below 100 was in 2016. USD/JPY reached a low of just a few pips below 99.00 and ranged between 99.5 and 107 for the summer until Nov when it rallied to the 118s.
USD/JPY has since been as low as 101.18 during the pandemic of March 2020.
Reprinted from FXStreet，the copyright all reserved by the original author.
Disclaimer: The content above represents only the views of the author or guest. It does not represent any views or positions of FOLLOWME and does not mean that FOLLOWME agrees with its statement or description, nor does it constitute any investment advice. For all actions taken by visitors based on information provided by the FOLLOWME community, the community does not assume any form of liability unless otherwise expressly promised in writing.
FOLLOWME Trading Community Website: https://www.followme.com
Hot
No comment on record. Start new comment.