Curious. And Worrisome: Fed Intervenes to Support Japan Yen Currency

• Curious. And Worrisome: Fed Intervenes to Support Japan Yen Currency
  by https://halturnerradioshow.com/
  Yesterday, Friday, January 23, Currency Traders spotted reports / desk chatter that the New York Fed (the part of the US Federal Reserve that handles FX operations) was calling major banks and asking detailed questions about current yen trading levels and conditions.
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  This is called a “rate check”. It’s not an actual buy/sell order, but it’s a very public signal often used right before (or as preparation for) actual currency intervention. Markets interpreted this as the US potentially helping Japan defend the yen.
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  These inquiries by the Fed hinted as possibly even a coordinated or at least tacitly supported action (rare, because the US usually doesn’t care much about supporting other currencies unless it aligns with bigger G7-type agreements).
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  Result: The yen suddenly jumped higher (meaning USD/JPY fell sharply) by about 1.7–2% in a very short time, one of the biggest single-day moves in months.
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  Why is this unusual?  The last time the US (via NY Fed) got this visibly involved in supporting the yen was over 25 years ago (late 1990s / Asian financial crisis era, with G7 coordination). Japan has done unilateral interventions multiple times (buying yen / selling dollars from their reserves), but getting overt US help signals something bigger, markets read it as “the Americans are okay with (or even quietly backing) Japan stopping the yen slide.”
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  This reverses some of the recent yen weakness very quickly and spooks traders who were short yen (betting it would keep falling).
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  read more.

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