Japan, declares war on the Federal Reserve

| "When the currency accelerates, traders' hands tremble with nervousness, not knowing where USD/JPY will go because it is falling so fast. ”

There are two major events in global markets this week, but most people are aware of only one of them.

One is the non-farm payrolls report, and the other event that is ignored by most retail investors is the "raid" of Japan (JPY) against the US dollar.

This "raid" began on Wednesday.

Bank of Japan Deputy Governor Ryozo Himino, speaking to local business leaders, said monetary easing would continue until the Bank of Japan achieves its sustainable inflation target. However, he then shifted gears to analyze Japan's past shift to negative interest rates, mentioning the potential implications of a massive withdrawal of stimulus.

There is no doubt that he is signaling to the market that the Bank of Japan is about to exit its negative interest rate policy. That may not be obvious enough, as people familiar with the matter revealed to the news media that local bank executives called on the central bank to abandon negative interest rates in a meeting with central bank officials last month. On the same day, the market brought forward the expectation that the Bank of Japan would exit negative interest rates from April to January next year. However, the yen did not rise sharply on the day, and USD/JPY edged up by 0.1%.

The real "shock" of global markets began on Thursday.

Bank of Japan Governor Kazuo Ueda said in response to a question about policy management in the Diet that monetary policy formulation will become more challenging from the end of the year into next year.

After the negative interest rate is removed, the possible policy rates will include the unsecured overnight lending rate, and the interest rate on excess reserves on the current account of commercial banks at the Bank of Japan. If the Bank of Japan raises interest rates, there are multiple options for the policy rate.

The shock was followed by a 12-hour downward trend for USD/JPY, falling from the 147 level to the 144 level.

But that was not enough, and the news that the Japanese news agency had arrived at Prime Minister Fumio Kishida's office in Tokyo that afternoon heightened tensions.

Financial markets are in shambles.

Markets have further advanced the BoJ's exit from negative interest rates to December this year, starting to trade the whole idea of the BoJ's policy shift in a single day, rather than more than a month. USD/JPY fell from the 144 level to the 141 level at one point.

The day's decline was as high as 4%, which is an astronomical drop for a currency.

Weak Japanese bond auctions added fuel to the fire on the day, with the 10-year Japanese bond yield rising the most in a year, and traders did not need much encouragement to abandon their bearish bets on the yen.

The U.S. dollar index has seen a rare sharp decline during the Asian trading session, and few people know why, and the level of awareness is stuck outside Japan.

The yen is the third largest foreign exchange market with a daily trading volume of $7.5 trillion, which is also a key transmission mechanism for the Bank of Japan to cause market volatility.

The phones of Wall Street strategists rang incessantly, and clients kept asking them what was going on and what would happen next. When the currency accelerates, traders' hands tremble with nervousness, not knowing where USD/JPY will go because it is falling so fast. In the face of crazy price movements,

Many traders did not dare to slack off during the three trading sessions of Asia, Europe and the United States.

It is clear that this "raid" launched by Japan against the dollar was successful, at least without using any "ammunition" to beat the USD/JPY pair from 147 to the level of 144.

The next day (Friday) the Fed seemed to be in response, and the dollar index began to rise in a rare and sustained rise at the beginning of the Asian trading session, falling for only an hour throughout the Asian trading session, and rising most of the time. The Asian trading session is usually the least active and least volatile time of the day. As long as there is a large volatility during this period, there must be something important.

On the same day, Bank of America released a bearish yen report, expecting the yen to fall to 155 yen per dollar in the first quarter of next year.

It is worth mentioning that the US non-farm payrolls data were released that night, and you know the results - all the data exceeded market expectations, and the dollar index recovered almost all of Thursday's losses on the day, and the most interesting thing is that USD/JPY closed exactly in the middle of Thursday's high and low (the day's high was 147, the lowest was 141, and Friday's close was 144).

In addition, there was a miraculous thing that happened on Friday night - the US stock market did not fall. A positive data triggered a sharp drop in Fed rate cut expectations, but U.S. stocks did not fall. Just as many people wonder why the dollar index fell sharply on Thursday, an era dominated solely by Fed interest rate expectations is coming to an end.

There is a big drama going on in the financial markets every day, but nothing happens in the eyes of those who don't know how to do it. And next week is a battle of the century between the Fed and the market, and you can't even read the excitement just by looking at the news media reports.

1. The report will be released next Tuesday when the US CPI data is released and the Federal Reserve interest rate decision is released next Thursday.

2. Released the latest "Global Market Barometer", updated the latest forecasts for U.S. stocks, U.S. dollars, A-shares, gold, crude oil, U.S. Treasury yields and other markets - there must be more intelligent insights.

.data_color_scheme_dark{--weui-ORANGERED: #ff6146;--weui-BG-0: #111;--weui-BG-1: #1e1e1e;--weui-BG-2: #191919;--weui-BG-3: #202020;--weui-BG-4: #404040;--weui-BG-5: #2c2c2c;--weui-FG-0: rgba(255, 255, 255, .8);--weui-FG-HALF: rgba(255, 255, 255, .6);--weui-FG-1: rgba(255, 255, 255, .5);--weui-FG-2: rgba(255, 255, 255, .3);--weui-FG-3: rgba(255, 255, 255, .1);--weui-FG-4: rgba(255, 255, 255, .15);--weui-FG-5: rgba(255, 255, 255, .1);--weui-RED: #fa5151;--weui-REDORANGE: #ff6146;--weui-ORANGE: #c87d2f;--weui-YELLOW: #cc9c00;--weui-GREEN: #74a800;--weui-LIGHTGREEN: #3eb575;--weui-BRAND: #07c160;--weui-BLUE: #10aeff;--weui-INDIGO: #1196ff;--weui-PURPLE: #8183ff;--weui-WHITE: rgba(255, 255, 255, .8);--weui-LINK: #7d90a9;--weui-TEXTGREEN: #259c5c;--weui-FG: #fff;--weui-BG: #000;--weui-TAG-TEXT-RED: rgba(250, 81, 81, .6);--weui-TAG-BACKGROUND-RED: rgba(250, 81, 81, .1);--weui-TAG-TEXT-ORANGE: rgba(250, 157, 59, .6);--weui-TAG-BACKGROUND-ORANGE: rgba(250, 157, 59, .1);--weui-TAG-TEXT-GREEN: rgba(6, 174, 86, .6);--weui-TAG-BACKGROUND-GREEN: rgba(6, 174, 86, .1);--weui-TAG-TEXT-BLUE: rgba(16, 174, 255, .6);--weui-TAG-BACKGROUND-BLUE: rgba(16, 174, 255, .1);--weui-TAG-TEXT-BLACK: rgba(255, 255, 255, .5);--weui-TAG-BACKGROUND-BLACK: rgba(255, 255, 255, .05)}.data_color_scheme_dark{--weui-BTN-ACTIVE-MASK: rgba(255, 255, 255, .1)}.data_color_scheme_dark{--weui-BTN-DEFAULT-ACTIVE-BG: rgba(255, 255, 255, .126)}.data_color_scheme_dark{--weui-DIALOG-LINE-COLOR: rgba(255, 255, 255, .1)}.data_color_scheme_dark{--weui-BG-COLOR-ACTIVE: #373737}.data_color_scheme_dark{--weui-BG-6: rgba(255, 255, 255, .1);--weui-ACTIVE-MASK: rgba(255, 255, 255, .1)}.rich_media_content{color:#000000e5; font-size:17px; font-size:var(--articleFontsize); overflow:hidden; text-align:justify}.rich_media_content{color:#ffffffa6; color:var(--weui-FG-HALF)}.rich_media_content{position:relative; z-index:0}.wxw-img{vertical-align:bottom}@media screen and (min-width:1024px){body:not(.pages_skin_pc) :root{--appmsgPageGap: 20px}}:root{--articleFontsize: 17px}:root{--sab: env(safe-area-inset-bottom)}:root{--wxBorderAvatarRatio: 3}:root{--discussPageGap: 20px}:root{--appmsgPageGap: 20px}.rich_media_content p{clear:both; min-height:1em}td p{margin:0; padding:0}@media(prefers-color-scheme:dark){body:not([data-weui-theme=light]) .rich_media_content img:not(.wx_img_placeholder){filter:brightness(.8)}}blockquote{padding-left:10px; border-left:3px solid #dbdbdb; color:#00000080; font-size:15px; padding-top:4px; margin:1em 0}blockquote{color:#ffffff8c; color:var(--weui-FG-1)}@media(prefers-color-scheme:dark){body:not([data-weui-theme=light]) .rich_media_meta_text,body:not([data-weui-theme=light]) .icon_appmsg_tag.default,body:not([data-weui-theme=light]) .simple_pagination,body:not([data-weui-theme=light]) .sp_page_current,body:not([data-weui-theme=light]) blockquote,body:not([data-weui-theme=light]) .blockquote_info{color:#ffffff4d}}@media(prefers-color-scheme:dark){body:not([data-weui-theme=light]) blockquote{border-color:#404040}}@media(prefers-color-scheme:dark){body:not([data-weui-theme=light]) blockquote{border-color:#404040}}.data_color_scheme_dark .rich_media_meta_text,.data_color_scheme_dark .icon_appmsg_tag.default,.data_color_scheme_dark .reward_area_win .reward_user_tips .weui-loadmore__tips a,.data_color_scheme_dark .simple_pagination,.data_color_scheme_dark .sp_page_current,.data_color_scheme_dark blockquote, .data_color_scheme_dark .blockquote_info{color:#ffffff4d}.data_color_scheme_dark blockquote{border-color:#404040}*{margin:0; padding:0}.rich_media_content *{max-width:100%!important; box-sizing:border-box!important;-webkit-box-sizing:border-box!important; word-wrap:break-word!important}body,.wx-root,page{--weui-BTN-HEIGHT: 48;--weui-BTN-HEIGHT-MEDIUM: 40;--weui-BTN-HEIGHT-SMALL: 32}body,.wx-root{--weui-FG-1: rgba(0, 0, 0, .55);--weui-ORANGERED: #ff6146;--weui-BG-0: #ededed;--weui-BG-1: #f7f7f7;--weui-BG-2: #fff;--weui-BG-3: #f7f7f7;--weui-BG-4: #4c4c4c;--weui-BG-5: #fff;--weui-FG-0: rgba(0, 0, 0, .9);--weui-FG-HALF: rgba(0, 0, 0, .9);--weui-FG-1: rgba(0, 0, 0, .5);--weui-FG-2: rgba(0, 0, 0, .3);--weui-FG-3: rgba(0, 0, 0, .1);--weui-FG-4: rgba(0, 0, 0, .15);--weui-FG-5: rgba(0, 0, 0, .05);--weui-RED: #fa5151;--weui-REDORANGE: #ff6146;--weui-ORANGE: #fa9d3b;--weui-YELLOW: #ffc300;--weui-GREEN: #91d300;--weui-LIGHTGREEN: #95ec69;--weui-BRAND: #07c160;--weui-BLUE: #10aeff;--weui-INDIGO: #1485ee;--weui-PURPLE: #6467f0;--weui-WHITE: #fff;--weui-LINK: #576b95;--weui-TEXTGREEN: #06ae56;--weui-FG: #000;--weui-BG: #fff;--weui-TAG-TEXT-RED: rgba(250, 81, 81, .6);-- weui-TAG-BACKGROUND-RED: rgba(250, 81, 81, .1);--weui-TAG-TEXT-ORANGE: #fa9d3b;--weui-TAG-BACKGROUND-ORANGE: rgba(250, 157, 59, .1);--weui-TAG-TEXT-GREEN: #06ae56;--weui-TAG-BACKGROUND-GREEN: rgba(6, 174, 86, .1);--weui-TAG-TEXT-BLUE: #10aeff;--weui-TAG-BACKGROUND-BLUE: rgba(16, 174, 255, .1);--weui-TAG-TEXT-BLACK: rgba(0, 0, 0, .5);--weui-TAG-BACKGROUND-BLACK: rgba(0, 0, 0, .05)}body,.wx-root{--weui-BG-6: rgba(0, 0, 0, .05);--weui-ACTIVE-MASK: rgba(0, 0, 0, .05)}@media screen and ( min-width:1024px){body:not(.pages_skin_pc){background:#191919; background:var(--weui-BG-2)}}@media(prefers-color-scheme:dark){body:not([data-weui-theme=light]).my_comment_empty_data{background-color:#111}}.wx-root,body{--weui-BTN-ACTIVE-MASK: rgba(0, 0, 0, .1)}.wx-root,body{--weui-BTN-DEFAULT-ACTIVE-BG: #e6e6e6}.wx-root,body{--weui-DIALOG-LINE-COLOR: rgba(0, 0, 0, .1)}.wx-root,body{--weui-BG-COLOR-ACTIVE: #ececec}@media(prefers-color-scheme:dark){.wx-root:not([data-weui-theme=light]),body:not([data-weui-theme=light]){-- appmsgExtra-BG: #121212}}@media(prefers-color-scheme:dark){.wx-root:not([data-weui-theme=light]),body:not([data-weui-theme=light]){--weui-ORANGERED: #ff6146;--weui-BG-0: #111;--weui-BG-1: #1e1e1e;--weui-BG-2: #191919;--weui-BG-3: #202020;--weui-BG-4: #404040;--weui-BG-5: #2c2c2c;--weui-FG-0: rgba(255, 255, 255, .8);--weui-FG-HALF: rgba(255, 255, 255, .6);--weui-FG-1: rgba(255, 255, 255, .5);--weui-FG-2: rgba(255, 255, 255, .3);--weui-FG-3: rgba(255, 255, 255, .1);--weui-FG-4: rgba(255, 255, 255, .15);--weui-FG-5: rgba(255, 255, 255, .1);--weui-RED: #fa5151;--weui-REDORANGE: #ff6146;--weui-ORANGE: #c87d2f;--weui-YELLOW: #cc9c00;--weui-GREEN: #74a800;--weui-LIGHTGREEN: #3eb575;--weui-BRAND: #07c160;--weui-BLUE: #10aeff;--weui-INDIGO: #1196ff;--weui-PURPLE: #8183ff;--weui-WHITE: rgba(255, 255, 255, .8);--weui-LINK: #7d90a9;--weui-TEXTGREEN: #259c5c;--weui-FG: #fff;--weui-BG: #000;--weui-TAG-TEXT-RED: rgba(250, 81, 81, .6);-- weui-TAG-BACKGROUND-RED: rgba(250, 81, 81, .1);--weui-TAG-TEXT-ORANGE: rgba(250, 157, 59, .6);--weui-TAG-BACKGROUND-ORANGE: rgba(250, 157, 59, .1);--weui-TAG-TEXT-GREEN: rgba(6, 174, 86, .6);--weui-TAG-BACKGROUND-GREEN: rgba(6, 174, 86, .1);--weui-TAG-TEXT-BLUE: rgba(16, 174, 255, .6);--weui-TAG-BACKGROUND-BLUE: rgba(16, 174, 255, .1);--weui-TAG-TEXT-BLACK: rgba(255, 255, 255, .5);--weui-TAG-BACKGROUND-BLACK: rgba(255, 255, 255, .05)}}@media(prefers-color-scheme: dark){.wx-root:not([data-weui-theme=light]),body:not([data-weui-theme=light]){--weui-BTN-ACTIVE-MASK: rgba(255, 255, 255, .1)}}@media(prefers-color-scheme:dark){.wx-root:not([data-weui-theme=light]),body:not([data-weui-theme=light]){--weui-BTN-DEFAULT-ACTIVE-BG: rgba(255, 255, 255, .126)}}@media(prefers-color-scheme:dark){.wx-root:not([data-weui-theme=light]),body:not([data-weui-theme=light]){--weui-DIALOG-LINE-COLOR: rgba(255, 255, 255, .1)}}@media( prefers-color-scheme:dark){.wx-root:not([data-weui-theme=light]),body:not([data-weui-theme=light]){--weui-BG-COLOR-ACTIVE: #373737}}@media(prefers-color-scheme:dark){.wx-root:not([data-weui-theme=light]),body:not([data-weui-theme=light]){--weui-BG-6: rgba(255, 255, 255, .1);--weui-ACTIVE-MASK: rgba(255, 255, 255, .1)}}@media(prefers-color-scheme:dark){.wx-root:not([data-weui-theme=light]),body:not([data-weui-theme=light]){--discussInput-BG: rgba(255, 255, 255, .03)}}@media(prefers-color-scheme:dark){.wx-root:not([data-weui-theme=light]),body:not([data-weui-theme=light]){--nickName-FG: #959595}}

div.autoTypeSetting24psection > p,div.autoTypeSetting24psection > section{margin-bottom: 24px;}