USD/JPY is quickly lower on this.
- Desirable for FX to move in stable manner reflecting fundamentals
- Will take appropriate action
- Clearly seeing one-sided, rapid moves
This is the strongest language yet and it comes after the yen sold off hard despite today’s Bank of Japan rate hike. The BOJ hiked short-term rates today to 0.75%, which is (amazingly) the highest in three decades.
The move was not a surprise to markets and it initially strengthened but it appears as though sellers were waiting in the weeds and have been dumping since, boosting USD/JPY by more than 150 pips.
Zooming out, USD/JPY is challenging the November highs and that would pit it within striking distance of the January high.
USD/JPY daily
While this chart doesn’t look that alarming, note that EUR/JPY is at a record high 184.35 and GBP/JPY is at the highest since 2008.
Moreover, the finance minister should be most-concerned with finance and the market isn’t liking what’s happening in Japanese bonds. Thirty-year borrowing rates for the Japanese government are up to 3.42%, which is the highest since at least 2000 and the trajectory is extremely worrisome for the most-indebted major economy.
JPY 30 year rates – JGBs
