Funny how some news go unnoticed. It is just a matter of time when the rest will do the same
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Moments ago the 101 USDJPY tractor beam was broken, sending the pair lower, as a red headline hit the tape saying that...
Which incidentally was long overdue: with the BOJ scrambling to contain bond (and stock, if only to the downside) volatility, it was always the FX market that was the primary uber-levered culprit moving both asset classes. As such, it was very surprising that in a world in which all correlated asset classes (just look at the USDJPY-ES relationship) are driven by FX, that currency leverage and margin rules have remained largely untouched by regulators and central bankers whose credibility is suddenly slipping away, alongside the surge in global market volatility in the past week.
More from the Nikkei:
While the details are still unclear, it is clear that Japan is finally focusing on JPY vol. Which also means that the days of unbridled soaring of the USDJPY pair are limited. And since the US market has been linked to the Yen for the past month, the spike in the Yen is what has caused a sudden air pocket under the US market to develop.
What happens further: we wait and see for the reaction by Mrs Watanabe in a few hours.
source ...