Japan is F****** with the market (updated)

With lot's of 'strange' bids (USD) from suspected BoJ intervention. The Japan Gov and BoJ spooked markets with alleged emergency meeting re: the YEN appreciation. Now this isn't going to happen both China (buying YEN and Japanese bonds) and the US would like to see higher YEN to help with their exports markets (particularly China, the first shots in full scale protectionism).

So there will be no collaborated intervention to slow the rate on the YEN appreciation, all the BoJ has left is verbal intervention (market rumours, threat of money printing etc) and 'mild' secret bids.

from Reuters Aug 19th 2010

"The dollar pared gains against the yen on Thursday after sources familiar with the matter said the Bank of Japan is highly unlikely to hold an emergency meeting later in the day.

Rumours had circulated in the market that the BOJ would hold an emergency policy meeting at 2 p.m. local time (0500 GMT) after a media report that the central bank had started considering additional monetary easing steps.

The most likely option under consideration is expanding the BOJ's fund-supply tool put in place in December, Japan's Sankei newspaper said, without citing sources.

The central bank may either expand the fund supply volume to 30 trillion yen ($352 billion) from 20 trillion yen, or extend the duration of cheap, fixed-rate loans to banks to six months from three months, the paper said. [ID:nTOE67H06U]

The report weighed on the yen somewhat but the overall reaction was limited as investors remained cautious until they see exactly what the authorities might do."