Japan and the United States announced they joined forces on Friday to buy yen. They did this together. As a team. Because apparently when you lose money fighting the forex market it helps to have a buddy.
The finance ministry dropped this news on Monday. Three full business days to workshop the press release. To get the wording just right. To make coordinated failure sound like coordinated strength.
Here's what happened: Two of the world's largest economies looked at a currency pair and said "that price is wrong" and then spent billions of dollars trying to prove it. The market, which does not read press releases or care about bilateral cooperation, promptly ignored them. But they signaled readiness for more. More of the same thing that didn't work. More coordinated intervention. More burning through reserves to move a line on a chart for six hours before it snaps back.
The yen has been getting destroyed for months. Retail traders watched it fall. They shorted it. They made money. Then the finance ministry stepped in to teach them a lesson about respecting central authority. The lesson cost the Japanese government approximately twelve billion dollars per hour of temporary price stability.
And they did it with America. Together. The Treasury joined in. Two nations. One useless trade. You know your intervention is going well when you need to call for backup. When the second-largest holder of U.S. debt needs the U.S. itself to help prop up its own currency by buying it in the open market like some kind of geopolitical GoFundMe.
They signaled readiness for more. That's the key phrase. Readiness. Not success. Not effectiveness. Readiness. The financial equivalent of "we can do this all day" while your nose is bleeding and your wallet is empty.
Retail traders who went long on Friday are still trying to figure out how they lost money on a coordinated G2 intervention.
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