Trading of the yen was significantly less volatile in the European trading session versus this morning as the price of the yen held relatively firm following a coordinated intervention by the G7 nations helped to stabilize the price of the yen.
At lunch time during the European trading session, the USD/JPY was trading lower with significantly less volatility at 81.44 after opening the day at 81.81.
Yesterday the yen received coordinated support from the G7 finance ministers in both words and in action as the United States, the United Kingdom, Canada, and the European Central Bank all pledged to support the yen on the open market. The joint effort to sell the yen via the central banks’ operation desks comes on the heels of the worst disaster in Japan since WWII.
Thursday the USD/JPY rose from 78.80 to a high of 81.98. This is in contrast to Wednesday’s low of 76.41 after speculators attacked the yen following a breach of the 80 yen level and a lack of a response by the Japanese government.
It remains to be seen if the intervention will have a significant impact on the yen given that the previous intervention by the Japanese Ministry of Finance on September 15th had only a short term impact on the value off the yen with the price of the USD/JPY rising 300 pips over three days before the pair resumed its sharp downtrend.
Traders should note that following yesterday’s intervention, the USD/JPY came off of its low for the day and rose 375 pips before beginning to decline once again.
