The Japanese yen was unusually active this past week. In fact, USDJPY’s level of volatility this past week was the highest we have seen since the late-October intervention by the Bank of Japan. In fact, when we look at the initial surge (Tuesday) and subsequent slump in the second half of the week, we are left with a picture that looks very much like another failed manipulation effort by either the central bank or Ministry of Finance. The typical path there is a dramatic rally from the combination of the unnatural bid and drive through dense stops and entries on the otherwise quiet pair. This is followed shortly by a natural unwinding to drive the currency back towards its safe haven highs. So, was last week’s short-lived swell an intervention move? There was no official report or even serious speculation. Perhaps this is a natural (permanent?) increase in volatility.
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