FX Timing USDJPY - Unilateral Intervention

With the GBPJPY - Pound vs. Yen Cross Rate

The unilateral intervention by the Bank of Japan could never have been timed better from their previous market interventions. As other central banks supported BoJ intervention during the Tsunami / Nuclear disaster; today's move was triggered more towards market's over speculation as they have claimed that distorts with the economic fundamentals. The spike, as we termed it, then and now have been pricing in the 79.18/50 high and is maintaining at this levels.

The trading culture of Asian traders/strategist particularly the Bank of Japan has been known for their intervention skills of timing the market participants at the least expected time. Although, there is no real pattern that can be pin-pointed as to when such actions would be done, it is merely based on speculation as other traders would. However, with the length of trading experience these could be narrowed down with the kind of market behavior and price movement that currency pairs shows. 

With that said, the GBPJPY was amongst the least expected cross rate pairs to move in closest line and correlation with the Japanese Yen. And obviously was not in the radars or market limelight during this time. This is simultaneously traded with the EURGBP cross rate as a cross trade from our long position as of the Oct 10 market view analysis. By following the sequential market analysis from October 10 to the 31th would provide a better understanding of our trade outlook and strategies applied.

As the Euro has been the dominant market moving pair due to the back and forth crisis between the sovereign debt and the US economy. Currently, the GBPJPY was the preferred pair even comparing it with the EURJPY, as most have stayed away from a bias bull market for the Euro especially with the G20 meeting thereafter.

Opening with the new month of November, overlay with the opening of the wee and closing day for the October month now stands to be volatile by the time US institutional players would come in after this Halloween weekend. The surprising move is what we have been anticipating and with some good choices between these currency pairs the GBPJPY couldn't have been a better choice. Please refer to our previous market view analysis dated 10.27 - Mid-Week Analysis.