+$91,567 in a week, USD/JPY Shockingly Hits 160 Yen! BoJ's 8 Trillion Yen Intervention Causes Plunge to 152 Yen! What's

From April 28th to May 3rd, my trades resulted in a gain of +$91,567.

At the start of the week, USD/JPY surged into the 160 yen range. The Bank of Japan (BoJ) appeared to have stepped in with real intervention, spending about 8 trillion yen over two days, on the 29th and 2nd. Coinciding with this, FRB Chairman Powell denied the possibility of a rate hike, and U.S. economic indicators were uniformly poor, leading to significant selling of the U.S. dollar and a drop in USD/JPY to the 152 yen range.

It turned out to be a significant victory for the BoJ.

This has greatly altered the chart's formation, dampening the momentum of speculators who had been chasing higher prices. While I had been considering buying USD/JPY, I now plan to look for selling opportunities instead.

Key points of focus going forward are:

1. Chance of a Rate Cut in September Rises to About 78% Due to Slower Job Growth
   • On May 3rd, the U.S. interest rate futures market saw strengthened speculation that the Federal Reserve would initiate its first rate cut of the year in September, following weaker-than-expected U.S. employment and average wage growth in April.
   • In the interest rate futures market, the probability of a rate cut at the September FOMC meeting rose to about 78%, up from about 63% before the release of the employment data. The market is now pricing in two 25 basis point cuts this year, up from one cut before the employment report. (Source: Reuters)
2. BoJ's 8 Trillion Yen Market Intervention
   • There is a high likelihood that the Japanese monetary authorities intervened to buy yen in the foreign exchange market in the early hours of May 2nd, when the yen rate temporarily surged to 153 yen per dollar. The BoJ's current account balance forecast published on the 7th showed a significant discrepancy from market estimates, indicating that intervention was a factor.
   • The yen rate surged from the 157 yen range to just around 153 yen between 5 and 6 AM on the 2nd. Amid rising speculation about Japan's intervention, Kanda Masato, the Japanese Finance Ministry official, told Bloomberg, "I cannot discuss whether there has been an intervention at this time." If the discrepancy between the forecast and the market estimate of the BoJ's current account balance is large, it is considered that an intervention was conducted, and the market had been closely watching this data again. (Source: Bloomberg)

With Powell's comments and weak U.S. economic indicators overlapping, selling of the U.S. dollar continued, making the BoJ's forex intervention even more effective. Honestly, I did not expect it to drop nearly 10 yen from around 160 yen to the low 150s; I thought it would drop to around 155 yen at most.

Now that it has dropped this much, the chart has significantly topped out, which may invite further selling. Although I had planned to buy USD/JPY, I am now targeting sell opportunities.

P.S.

Continuing with AI-related developments, I'm focusing on the image-generating AI "Krea." This AI creates characters based on the user's pose and features specified in prompts, allowing one to pose and generate various characters. It's interesting because you can impersonate different people just by moving, but as AI becomes more popular, it might become harder to tell who is who online. As AI trends, meeting and talking to people in person might become an increasingly important and valuable experience.

https://www.krea.ai/

Have a great weekend!