Japan and the United States just announced they spent taxpayer money buying yen together on Friday. Coordinated intervention. That's what they called it. Like it's a military operation and not two finance ministries panic-clicking the buy button at the same time.
The press release says they're ready to do it again. Ready. As if readiness is the problem. As if the issue with currency intervention isn't that it doesn't work, but that they haven't been enthusiastic enough about lighting money on fire.
Here's what happened: the yen weakened because of interest rate differentials and basic monetary policy. Japan's finance ministry looked at this and thought, what if we just bought a bunch of yen real fast? The U.S. Treasury said sure, we'll help. Two of the largest economies on Earth saw a price they didn't like and decided the correct response was to become the world's dumbest day traders.
They moved the yen for about six hours.
Retail traders saw the headline and immediately started taking positions based on "intervention risk." They're now monitoring Janet Yellen's calendar and parsing Japanese ministry statements for clues. They've got alerts set for coordinated and readiness. They're building entire strategies around the idea that governments stepping in to manipulate prices is actually useful information and not just a announcement that someone with a larger account than yours is also wrong about direction.
The best part? They said they're ready for more. Not that it worked. Not that it achieved anything. Just that they're willing to do it again. That's the bar now. Readiness to repeat failure.
Somewhere a forex trader with a $1,200 account just shorted USD/JPY because two central banks told him exactly when they'd be on the other side of his trade.
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