Dollar slides across the board after USD/JPY selling hits
USD/JPY is now down 1.6% to 157.60 and that marks about a 300 pips decline from when Japan finance minister Katayama came out earlier to deliver one final intervention warning to markets. Of note, the pair is seeing a sharper decline in the past half-hour with that accounting for about half of the drop.
But at the same time though, it comes as the dollar is also sliding across the board against other major currencies. USD/CHF is down 0.6% to 0.7860 while AUD/USD is up 0.5% to 0.7150 on the day. Even EUR/USD is now up 0.2% to 1.1700 after having been relatively muted earlier on in the session.
As much as I’d like to pin this to Tokyo intervening, the price action doesn’t really feel like it is one. We’re seeing tiny bounces in USD/JPY amid the sustained volatility in this 30 minutes and that doesn’t quite fit the bill with actual intervention attempts. Typically, you’d see a quick and sudden 200-300 pips drop with no pushback whatsoever. So again, this could be a case of a 'rate check’ being performed.
Circling back to the dollar though, the timing of all this is a bit tricky. Let’s be reminded that this is also the end of April and month-end flows could also be a big factor driving part of the market move here.
Besides that, equities remain in a bit of a bind but holding steadier overall. S&P 500 futures are up 0.2% while European indices are keeping more mixed with the DAX up 0.3% but CAC 40 down 0.6% on the day.
This article was written by Justin Low at investinglive.com.