Well, the Ministry of FinanceÂ evidently did not instruct the Bank of Japan to intervene to weaken the Yen last night, nor, apparently, has it done so thus far this evening. In the meantime,Â dealers took the Dollar up about a Yen from the recent low of 75.95; it is currently trading at 76.85. The Yen was given a nudge down last night when Finance Minister Koda warned that he was getting really, really, mad, and could act at any moment. Talk is certainly cheaper than intervention, as long as it gets the job done, and thus far shorter term players seem content to sell Yen, since that’s working. In addition, there’s now some political uncertainty, since Prime Minister Kan has announced that he is stepping down – which was widely anticipated – and that a new Prime Minister will be chosen on August 30. Japanese stocks, led by exporters, are up about 1 per cent in the early going.
I have to admit thatÂ after a couple of weeks of fun and games, today was beyond boring. We saw some flows in the morning, with reserve managers – central banks and sovereign wealth funds – buying reasonable amounts of Australian and Canadian Dollars, and, more unusually, Sterling. By the time the London fixing rolled around at 11 EDT, the day was pretty much done, and only the metals desk sounded lively. Since the big event of the week is Fed Chair Bernanke’s speech at the Kansas City Fed’s annual gathering at Jackson Hole, and that doesn’t occur until Friday, this has the potential to be a long week. Plenty of people are on vacation, and August is traditionally on the slow side, so perhaps my complaints are misplaced. Today would have been a terrific day for golf.
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