Kyle Rodda was on the thirty fourth floor of Capital.com’s Melbourne office when the yen suddenly plunged to around 160 per dollar initially of Asia Day. The trading floor exploded.
“It was almost like a game of bingo – everyone suddenly shouted 160,” said Rodda, a strategist who sat amongst six traders who watched yen trading volume surge to about five times normal. “Everyone was trying to buy the dip for the next push and the trading went both ways – it was pretty wild.”
From Melbourne to Tokyo, market participants scrambled to trade and understand the fluctuations of the embattled Japanese currency on one of the crucial volatile days in recent memory. The yen fell by greater than 1 % in early trading before making a reversal and rallying sharply by greater than 2% around 1pm in Singapore.
The jitters were compounded by low liquidity as a result of a neighborhood holiday, at the same time as investors awaited official intervention to support a currency that is still at a 34-year low.
There is a number of speculation as to what caused the fluctuations.
IG Markets said the yen’s sudden swing from losses to gains had “all the hallmarks” of an intervention. Not so, other Asia-based traders said. Mizuho Securities believed profit-taking accelerated a number of the rapid moves.
And the Japanese authorities didn’t help explain the main moves. Asked by reporters whether or not they had entered markets to support the yen, Japan’s top monetary official responded said “No comment at the moment.”
In Singapore, currency trader Mingze Wu drank his sixth cup of tea for the day because the yen swung from losses to gains. No one had a transparent idea of what was happening, nor whether any official intervention had taken place.
“It’s like everyone is trying to figure out what’s going on, but everyone has almost no idea,” said StoneX Financial’s Wu. “It’s like watching a car crash as you drive past.”
There was also no rest for Shoki Omori in Tokyo, who signed up to observe the yen after his phone beeped warning that the Japanese currency had fallen to 160.
“I wanted to relax and enjoy the long weekend after a very busy week of currency volatility and the BOJ’s monetary policy decision,” said Omori, chief strategist at Mizuho Securities Co. “Lunch is for wimps,” he said added He has been sitting in front of the screen because the dollar-yen began to rise.
Things were similarly hectic in Sydney, where Rodrigo Catril fielded a barrage of questions on the yen’s performance from customers to members of the sales team.
“It was crazy,” said Catril, a strategist at National Australia Bank Ltd., who didn’t manage to eat lunch until about 3 p.m. “A lot of people asked questions.”
