The Decline Of The Yen Is Clearly Under Pressure.

In the financial market, Taro Aso is perhaps a rather tragic character.

As the "propagandist" of Abe Shinzo's economic blueprint, the world never seemed to have listened seriously to the Japanese words of the former Japanese Prime Minister. The more Taro Aso expressed his remarks on containing the appreciation of the yen, the more traders chose to ignore it.

The more Taro Aso prayed for foreign investors not to sell Japanese stocks, the faster the foreign investors would sell.

The more he asked China to respond.

The problem of imbalance is that China neglects him.

When Taro Aso used the strongest tone of his presidency to issue a warning that he might intervene in the yen, traders seemed to finally notice him. On Eurasian Eurasia on Monday, the US dollar rose against the yen, and now it has been refreshing a high of 108.11 a week, breaking the 108 barrier.

The yen plunged more than 100 points in the day, leading to a decline in the G10 currency.

Many industry insiders said that Taro Aso's latest statement made the Japanese yen under obvious pressure.

Taro Aso, Japan's finance minister, said on Monday that if the yen continued to rise sharply, he was ready to intervene in the foreign exchange market. He ignored the speculation that the US opposition would limit the actions of the Japanese government. Taro Aso,

Taro Aso's statement to the Japanese parliament is another sign of the tension between the US and Japan.

Facing the slowdown of global economy, both the United States and Japan are facing various difficulties in economic growth.

Generally speaking, a stronger local currency will weaken its export competitiveness.

Taro Aso said that Japan has certainly prepared itself and will intervene if the yen continues to fluctuate.

This is the first time he has referred directly to the possibility of intervention, and foreign exchange intervention has been increasingly regarded as an undesirable manipulation by developed countries.

Taro Aso especially mentioned that the US dollar to Japanese yen exchange rate fluctuated to 5 yen in two trading days, which was overdone.

Jinhui Finance reported last week that during the visit of Japanese Prime Minister Abe Shinzo to Europe, he once revealed the willingness of the United European Union to stabilize the exchange market.

Andouble said at the time, "we are observing the dynamics of the exchange market. If necessary, we will have to take action."

German Chancellor Merkel responded by saying that there will be no winners in currency competition, and that "the relative stability of exchange rates is very important."

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The government's attitude is that it is the first time since Taro Aso took office and the highest level of intervention warning of the government's oral statement.

When the market fluctuates slightly, officials usually refuse to comment, or just say something like this: "we are not moved by the trend of the foreign exchange market".

If markets fluctuate, they will say, "hope."

It can be stable "or" hope that the exchange rate can truly reflect Japan's economic fundamentals ".

When the government starts to show worries, such wording will appear: "pay attention to the trend of foreign exchange market", "pay close attention to the trend of foreign exchange market" and "pay close attention to the trend of foreign exchange market".

When the market volatility further aggravates, "we do not want to see an unexpected / sudden / sharp rise and fall in the exchange rate", "unwilling to see the exchange rate trend that does not truly reflect the fundamentals of the economy", "do not want to see excessive fluctuations in the exchange rate", and "excessive fluctuations in the exchange rate will have an undesirable effect on the economy".

When the trend of the foreign exchange market makes officials unable to sit still, you will hear them say, "the current exchange rate does not reflect the fundamentals of the economy" and "the rise / fall of the yen is a bit overdone / too one-sided".

The next step will be the word "obvious": "the current exchange rate obviously does not reflect the fundamentals of the economy", "the trend of exchange rate is obviously overdone / one-sided".

Finally, it should be a warning to intervene: "in order to deal with excessive fluctuations in the exchange rate, it is not possible to exclude any means" and "stand ready to take decisive / bold action to curb excessive / speculative fluctuations in the foreign exchange market".

Previously, many investment banks had predicted that the BoJ might intervene in the foreign exchange market when the US dollar fell to 105 against the yen.

From the historical fluctuations of the yen, the US dollar has only seen two times against the yen in the past 8 years, such a sharp decline this year.

One was in 2008 when the global financial crisis happened, and another was in 2011 when the European debt crisis was high. The two investors were buying yen for hedge risk factors.

However, the strength of the yen this year is clearly not in the face of an unprecedented crisis in the global market.

It is worth mentioning that although many funds are still on the front line for betting on the appreciation of the yen, some "smart money" have begun to hold a clear head of yen.

Commercial traders, as smart money, are carrying close to record high yen head positions, with a total of about 68 thousand options and futures contracts.

Before such extreme positions were held, the appreciation of the yen would normally be suspended, or the yen would be heavily sold.