WE HAVE THE NUMBERS WITH US.
THEY INTERVENED WITH ABOUT ¥3.5 TRILLION, ARE THEY THROWING
GOOD MONEY AFTER BAD? >> THIS IS TOO GOOD OF A CARRY
TRADE TO GIVE UP ON IS THE TRADER'S PERSPECTIVE.
THEY ALREADY SPENT THE WHOLE AMOUNT THEY USED IN 2022 SHOWS
THIS IS A MARKET THAT REALLY WANTS TO BUY THIS DEBT.
IT WILL KEEP DOING SO AS LONG AS THE FED DIVERGENCE STAYS
INTACT. IT IS ONE THING TALKING ABOUT
THE FED HIKING OR CUTTING RATES. THE REAL ISSUE IS THE BANK OF
JAPAN IS VERY SLOW IN ITS TIGHTENING PROGRESS. UNLESS IT GOES ON AN AGGRESSIVE
HIKING CYCLE, WE EXPECTED DOLLAR-YEN TO BE BOUGHT ON
EVERY SINGLE DIP. THEY PROBABLY BE USING LOADS OF
MONEY DURING ILLIQUID HOURS, WHICH IS A KEY ISSUE BECAUSE
MONDAY JAPAN WAS OUT ON A HOLIDAY.
THE CAME IN YESTERDAY AFTER THE FED WHEN LIQUIDITY WAS AGAIN
LOW. THE THOUGHT AMONG TRADERS AS
THEY WILL DO IT AGAIN FRIDAY OR MONDAY.
THE U.K.'S CLOSED MONDAY AS WELL.
THE FACT THAT THEY ARE COMING DURING SUCH LIQUID HOURS TO ME
SHOWS THAT THEY ARE NOT CONFIDENT THEY CAN GO AGAINST
THIS MARKET. IT IS VERY DETERMINED TO BUY
THE DIP. MANUS: IT PROVOKES THE NARRATIVE WHAT
MORE MUST THE BANK OF JAPAN DO? IF I LOOK BACK AT FRIDAY FROM
THE BANK OF JAPAN, THEY ARE LOWERING INFLATION GUIDANCE FOR
THIS YEAR AND NEXT YEAR. AND THE NARRATIVE IS THEY DON'T
WANT TO HIKE RATES AND BE AGGRESSIVE, BUT THEY MAY BE
LEFT WITH NO ALTERNATIVE. UNLESS THERE IS TRIPARTITE
INTERVENTION AS INTIMATED BY THE LETTER DELIVERED BY THE
JAPANESE, BY THE SOUTH KOREANS AND BY THE AMERICANS. >> THE FED IS THE KEY, YES. IF YOU ARE A TRADER AND THE FED
IS IN THE MARKET SELLING DOLLAR-YEN, YOU WANT TO NOT
CATCH THAT FALLING KNIFE. THAT CAN BE A BIG GAME CHANGER.
YOU CAN DROP BELOW 150 ON THE LINK OF AN EYE.
YES, UNILATERAL INTERVENTION IS WHAT TRADERS ARE NOT AFRAID OF.
IF IT GETS MORE COORDINATED, THAT IS ANOTHER STORY. DANI: IT IS A SCARY PROSPECT THAT THE
YEN IS TIED TO THE FATE OF THE FED AT THIS VERY MOMENT BECAUSE
OF WHAT WE HEARD YESTERDAY. WE HEARD A FED THAT FRANKLY HAS
NO IDEA WHEN THEY ARE GOING TO CUT.
THEY SAY THEY ARE NOT GOING TO HIKE, BUT THE DIRECTION AND
DURATION OF HOW LONG WE LAST WHERE WE ARE IS SO UNCERTAIN,
THAT WE'RE SO DATA DEPENDENT. HIS THAT NOT THIS KIND OF
ACTION EVERY SINGLE TIME WE GET A PIECE OF U.S.
DATA THAT TELLS US SOMETHING ABOUT WHAT THE FED WILL DO, IS
THAT THE WORLD WE ARE LIVING IN WITH THE YEN? >> IT'S TRUE, OR ONE VERY MUCH
DATA DEPENDENT ACROSS THE FX SPACE. REMEMBER, IT IS VERY MUCH
DOLLAR AND FED DRIVEN. WE GET THE U.S.
PAYROLLS REPORT TOMORROW. I BELIEVE THE FED'S FOCUS HAS
TURNED TO THE LABOR MARKET MORE THAN THE INFLATION FRONT.
THE PROGRESS IS NOT GOING AS THEY HELPED ON THE INFLATION
PATH, BUT THERE IS SOME PROGRESS.
AS LONG AS THE LABOR MARKET STAYS ROBUST, I DON'T SEE HOW
THE FED CAN COMMUNICATE A DOVISH TURN.
YES, I THINK WE'RE DOWN TO WAITING EVERY HEADLINE THERE.
TRYING TO FIND THE NEXT CUT ALWAYS.
IF YOU LOOK AT THE DOLLAR TRADED WEIGHTED INDEX, IT IS
CONSOLIDATING WITHIN A AND ARRANGE THE PAST THREE WEEKS,
BECAUSE THE MARKET IS WAITING FOR DATA TO SIGNAL IF THEY HAVE
TO HIT THE BIGGER THE OFFER IN THE DOLLAR.
