Hi
I wonder why the usd/jpy moves so slowly? when I open a position with this pair, sometimes it takes a couple of days just to moves 30 pips up or down? is it because the pair is controlled by the BOJ? or is it something else?
Regards.
the ADR of USD/JPY is quite a bit smaller than say fiber or cable. That’s just the nature of the beast, but if you are talking about recently then yes. The fear of intervention, stealth buying by Japanese banks as well as position covering by exporters has lead to a very tight range. The BoJ likes this kind of action because it has paused the retracement back to the origin of their intervention. meaning they are holding price tight with fear and not having to spend any more money on it. Remember every pair has its characteristics you have to understand those before you can play it successfully.
That makes sense! but is it possible that another intervention is in place?. Because there was one just a couple of weeks ago.
Thank you very much
It’s a different type of intervention - instead of selling a massive amount of yen they constantly absorb the offers and keep a floor in place. BOJ plus semi-official bids handle this type of action. Plus traders are probably a bit wary about pushing it too far down in case there’s another full intervention. But nobody wants to bid it up so it just sits there until some event happens that causes a significant change.
Quite agree - the BoJ has shown the level they will defend, and have indicated that they will defend it again should Price get there, so things are just a little stalled. I took a Short inspired by the inside bar on the Daily right after the last intervention, so a couple of weeks or so ago, but other than that have not traded USD/JPY (although I ended up holding that Short a fair while). We just have a false, paralysed market on this Pair at the moment because of the fear of intervention and wider uncertainty. I has not always been so stalled, though - USD/JPY was in a beautiful and straightforward to trade downtrend for most of last year. Which unfortunately led to the original intervention lol.
ST