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Contributors Stealthy Yen Intervention…Keeping the Yen at Bay!
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For those of you that follow my World Currency Watch articles, you’ll remember thta I stated that the yen simply wasn’t acting right…like a freely tradable currency lately and that told me that I felt that the yen was being messed with – propping USD/JPY up above 76.00.

Well, last night I ran across an article that gave me the proof of what I saw playing out on the charts.

Here’s a little excerpt from the Bloomberg.com article:

Japan sold its currency five times in the final quarter of last year, the Ministry of Finance said on its website today, as the government moved to shield exporters’ earnings from the impact of yen gains.

The ministry’s quarterly data confirmed speculation that the nation carried out so-called stealth intervention following a record daily sale of 8.07 trillion yen ($105 billion) on Oct. 31, when the Japanese currency climbed to a post World War II high of 75.35 against the dollar. Japan sold a total of 1.02 trillion yen during the first four days of November, according to the report.

“Coming under growing criticism from overseas, Japan couldn’t openly intervene in the markets,”. 

It’s stealth-like intervention because they intervened without anyone officially knowing it since they never announced it like they normally do. However, the charts told me something was up. Take a look below. Click on the chart to enlarge it. 

After their “announced” intervention back in late October of last year (shown by the huge blue candle that spiked higher off of the 52-week lows)…the ultra-strong yen all of the sudden seemed to be held at bay. It was almost like you could pop a line at the 76.00 level. 

Financial markets rarely hold a “clean line” like that on their own after an intervention. Therefore, I was almost 100% certain that the Bank of Japan was selling the yen and buying dollars every time USD/JPY got down to around the 76.00 level…well, as of last night we have the proof that it is EXACTLY what was happening. 

The price action on the chart tells us a lot. They speak to us in a sense. We just have to pay attention to what they are trying to tell us. 

It’s just like a person that can’t technically speak…it doesn’t mean they can’t communicate. It means they can’t speak out loud. 

Well, while charts don’t “speak out loud”, they do communicate. We just have to learn how they speak. That’s what technical analysis does for the chartist. It’s like sign language for those that can’t speak. 

Ok, so where does USD/JPY head now? Well, a new uptrend could emerge if USD/JPY can close and continue to hold above the 78.00 level. So that’s the level to watch. See how it deals with 78.00. If it can top that…then the buyers may be back in control for the first time in years. 

Sean Hyman
My E-Book
info@worldcurrencywatch.com
Editor, Currency Cross Trader

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