Catching the wave
The Yen has clearly looked softer in recent days and surprising moves after the USDJPY spot peaked above 160 in recent sessions and the quick dramatic drop following the tag of that level for lack of visible intervention by the BoJ despite the release of their meeting minutes from their last meeting, earlier today. The Bank had been conducting market operations, including purchases of Japanese government bonds (JGBs), in accordance with the guideline for market operations and the guideline for conduct of yield curve control, both of which were decided at the previous meeting on January 22 and 23, 2024. Their statements indicate that in the money market, interest rates on both overnight and term instruments generally had been in negative territory. With regard to interest rates on overnight instruments, the uncollateralized call rate had been in the range of around minus 0.005 to minus 0.014 percent; general collateral (GC) repo rates had been in the range of around minus 0.059 to minus 0.104 percent. As for interest rates on term instruments, yields on three-month treasury discount bills (T-Bills) had increased.
Regardless of action/inaction by the BoJ, we had measured the most recent retrace from the 160+ top in the USDJPY spot which is in the chart below:
The chart of the JPY futures were similarly tapered the other way, and this prompted us to jump in, although way late in the game after we heard conversations on Bloomberg TV of unusual post close price action in the Yen. Therefore, the profits from this trade shown below are entirely dedicated to the reporting by Bloomberg TV, as we had not paid attention to actual setup assuming that the post session would unlikely bring too much movement.
Here is a downloadable version of the USDJPY chart https://app.screencast.com/dCWOa9EULwBKt and here is the version of the chart of Yen futures https://app.screencast.com/MYVWlX8ZoZBON In our service, we try and run down winning trades that include a sprinkle of the voodoo spirits associated with simple Technical Analysis:
Trade executions (USDJPY)
Trade result summary
On the date of publication, Murali Sarma did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
