The Japanese Yen has been showing extraordinary weakness in recent months which has been keeping USD/JPY bullish, pushing it above 150 this week and almost reaching 152 today. Other central banks have been raising interest rates in a hectic manner this year, while the Bank of Japan has been on hold, as inflation remains under control there. This has been depreciating the Yen, although Japanese officials remain ready to intervene and send the JPY higher.

USD/JPY 1-Minute Chart – Crashing More than 500 Pips Lower

The decline is not stopping 

The Japanese Ministry of Finance intervened in September and it seems like they are intervening again today as USD/JPY tumbles more than 450 pips lower. The last time they intervened, they took USD/JPY from a high of 145.90 down to a low of 140.34. That was 556 pips. So far today, the high-to-low range is 151.94 to 146.40, or more than 550 pips. Meanwhile, the USD is also weaker today which is adding further fuel to the USD/JPY crash and Daly’s comments earlier are giving the USD another kick lower.

Comments from FED’s Daly

• We can easily find ourselves overtightening
• Wants to avoid an unforced downturn by overtightening
• September summary is a good indication of where things are looking
• Rental price inflation is starting to slow
• Need to do everything in our power not to overtighten
• More tightening is needed
• Now we are in the stage of policy where we need to be thoughtful
• Fed getting to 4.50-5.00% next year is reasonable

Some dovish comments here and EUR/USD is at the highs for the day, while USD/JPY is at the lows. The idea earlier was that Timiraos was rolled out because the FED didn’t like the bond market getting ahead of it and pricing in another hike. These comments absolutely add to it and FED fund futures are now pricing in a 4.90% top from 5.03% yesterday since Daly is a mouthpiece for Powell.

USD/JPY Live Chart