The volatility movement is currently at its maximum for the Japanese yen. USD/JPY saw a very rapid decline from around 156.60 to 155.00 before being just as quickly bought back to the 156.10-20 levels.
It was not immediately clear whether this was a first check carried out by Japanese authorities. But the magnitude of the decline certainly invites such a possibility. However, the timing is definitely a bit suspect as it comes at a rather active time in the markets – also ahead of the US PCE price data later.
Rather, managers tend to look for the most effective and cost-effective time to intervene. And that’s not exactly it.
Regardless, the dip is bought quite strongly and this certainly suggests caution about the type of risk one may face if you are currently in a Yen trade.
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