Japan and the United States joined forces to prop up the yen. Finance Minister Satsuki Katayama will announce this like it's news. The yen declined. They called it excessive. They intervened.
Currency intervention is the financial equivalent of standing in front of a tsunami and asking it politely to stop. Trillions of dollars trade in forex markets daily. Japan and the US will throw billions at it. Maybe tens of billions if they're feeling spicy. The market will nod respectfully, wait six hours, and go right back to what it was doing.
Retail traders will see this headline and think they've cracked the code. They'll long the yen because two governments said so. They'll set their stop losses tight because they're responsible risk managers. The yen will bounce for ninety minutes. They'll screenshot their unrealized gains. Then the yen will resume drilling and stop them out before lunch.
The truly beautiful part is that Katayama will stress their determination. Not their success. Not their results. Their determination. You know who else was determined? Every person who ever lost money in forex. Determination doesn't move currency pairs. Capital flows move currency pairs. Interest rate differentials move currency pairs. Relative economic growth moves currency pairs. Press releases about determination do f*ck all.
Japan has been intervening in currency markets since before half of retail traders were born. They have spent hundreds of billions of dollars defending various yen levels. The yen is currently wherever the hell the market wants it to be. But sure, this time will be different because two finance ministers had a phone call.
The chart doesn't care about joint action statements, and your account balance is about to prove it.
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