The U.S. dollar edged higher against all major currencies today.
But the one currency pair in the spotlight today was the USD/JPY.
If you missed it, this past Friday, Japan intervened in the FX market and bought the yen after falling to a 32-year low near 152 to the U.S. dollar.
After USD/JPY rose to 151.94, the intervention drove USD/JPY down more than 700 pips to a low of 144.50 before rising again and closing the day around 1467.60.
Estimates by Tokyo money market brokerage firms put Japan spending 5.4 trillion-5.5 trillion yen ($36.16 billion-$36.83 billion) to buy yen.
That’s almost twice as big as the previous intervention when Japan spent 2.8 trillion yen ($18.81 billion) to prop up the yen.
Today, after the markets opened, the yen continued its slide!
The USD/JPY climbed higher to 149.70, before quickly plunging to 145.28 in minutes, raising suspicion that Japan intervened again!
I’ve marked the two suspected interventions on the 1-hour chart in yellow.
Japan’s top finance ministry officials have declined to confirm any currency interventions made.
When asked by reporters today, Masato Kanda, vice finance minister for international affairs at the Ministry of Finance (MoF), who oversees Japan’s exchange rate policy, said, “We won’t comment.”
And added, “We are monitoring the market 24/7 while taking appropriate responses. We’ll continue to do so from now on as well.”
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Even U.S. Treasury Secretary, Janet Yellen, pretended to be clueless, saying, “I’m not aware of any intervention that the Japanese have done, that they’ve indicated they’ve done.”
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Given that Japan has over $1.3 trillion in foreign reserves, it can technically afford to intervene many more times, but so far, any yen strengthening against the U.S. dollar that has occurred has been quickly reversed.
Let’s review what else happened in the FX market today…
Currency Market Movers
Which currency pairs gained the most today?
As shown by our FX Market Movers page, EUR/NZD was the leader of the pack, gaining 1.28% or 218 pips. ?
Which currency pairs lost the most today?
NZD/USD was the biggest loser, falling 1.38% or 79 pips! ?
One other currency pair to note is the GBP/USD.
The British pound remained under pressure today with the government still in chaos.
It also weakened due to the ongoing drama involving the news of who the next British prime minister would be.
After Boris Johnson dropped out, former finance minister Rishi Sunak will become the next prime minister after he won the race to lead the Conservative Party.
Currency Strength
What was the overall strength or weakness of individual major currencies today?
Based on the Currency Strength Meter on MarketMilk™, USD was the strongest currency. ?
The New Zealand dollar (NZD)) was the weakest currency.
Currency Short-Term Trends
When it comes to short-term trend strength, the euro (EUR) shows the most bullish strength, along with the Canadian dollar (CAD).
The Australian dollar (AUD) and the Swiss franc (CHF) are the most bearish.
Currency Volatility
Which currency was the most volatile today?
Based on our Currency Volatility Meter, it’s the U.S. dollar (USD).
Which currency pair was the most volatile today?
Given that the USD was the most volatile currency, it has to be a USD pair. But which one?
USD/JPY. It moved over 2.88% or a monstrous 419 pips!
Is USD/JPY a buy or sell?
Here’s what MarketMilk™ indicators says…
