USDJPY has popped 2.7% since Friday’s lows on the back of BoJ pronouncements that “of course, [they] could intervene in the currency markets.”
This, of course, is code for “of course, we can manipulate equity markets.” And, so, despite continuing weakness in CL, we see S&P 500 futures popping overnight. Can it last? Of course not. With oil at $44, a weakening yen imposes a heavy burden on Japanese businesses and consumers alike.
But, bottom line, their equity book is obviously much more important than their economy. That means we’ll continue to see plenty of intervention, especially if all it takes is talk — and, especially when SPX has completed bearish patterns such as last week’s H&S.
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