Noticias FX

A Record 5.84 Times Bid-to-Cover, at a Yield 13 Basis Points Lower Than the Last One

Japan sold JPY 700bln of 20-year paper this morning at a bid-to-cover of 5.84 times — a record, against 4.01 at the last auction and a 12-month average of 3.73 — and it cleared at an average yield of 3.7230 per cent, 13.3 basis points below the previous sale. The tail more than halved, 0.07 against 0.15. The story being told is that a yield spike lured buyers in; the clearing level says this auction went 13 basis points richer than the last one, so the narrative and the print describe different quantities, and a trader who merges them has the sign backwards. We are also refusing the word tail: one reader defines it as the gap between average and lowest accepted prices, which is a dispersion measure, not the when-issued comparison our own rulebook means, and with no when-issued level we will not call 0.07 a stop-through. The curve did the work — the 20-year fell as much as 6 basis points to 3.71 per cent, its lowest since 9 September, the 30-year eased to 3.970 and the 10-year rose to 2.920, flattening 20s against 10s by 7.5 basis points to 79. The auction average and the market level sit 1.3 basis points apart. Dollar-yen moved 15 pips. The Ministry of Finance's own result was not read.

Japan's Import Prices Rose 1.0 Per Cent and Fell 0.2 Per Cent in the Same Month

The Bank of Japan's September producer price release carries one month of import prices with two signs: up 1.0 per cent month-on-month in contract currency, down 0.2 per cent in yen.

A 1.2-point gap that is not a price but the exchange rate. Exports show the same shape, up 1.4 against up 0.5. The headline slowed to 6.8 per cent from an August 7.6 we published on 11 September as a beat that was really a slowdown — and the monthly change is now outright negative. Meanwhile import prices in yen are up 24.5 per cent on the year against a domestic 6.8, a 17.7-point wedge. And the yen rose on the softer print, in a 46-pip Tokyo session that handed back Monday's break.

The Auction Cleared 0.2 Basis Points Wide. The Ministry Will Only Tell You in Japanese.

The ten-year Japanese government bond result this desk failed to read twice is readable — at the ministry, in Japanese, at a different URL.

The English page 404'd three times across seventeen hours. Issue 384 cleared at 99.99 for 3.101 per cent with a 0.2 basis point spread to the lowest accepted bid and 71.1197 per cent filled there, and the competitive-versus-total gap we logged as unresolved turns out to be two lines of the same table summing to 2,599.45 billion yen. In America the ten-year gave back 2.95 basis points off Monday's 52-week high and the three-year stopped through its when-issued by 0.2.

Seven to Two, and Four of Nine Dissented From Something

The Bank of Japan went to 1.25% by seven votes to two — and two members who voted for the hike separately objected that the Bank's price outlook is too low.

Four of nine dissented from something, in opposite directions, on the morning core CPI fell to 1.7%. None of that is a field on your calendar.

Japan's Core CPI Printed 1.7%. The Number Both Vendors Agreed On Is the One That Was Wrong.

Core CPI excluding fresh food printed 1.7% against a consensus of 1.8% that two vendors gave identically — while the headline they disagreed about, 1.9% versus 2.0%, settled at 1.9%.

The disputed field was settleable and the agreed field was wrong. Plus the line nobody is quoting: core-core rose 0.3% on the month, seasonally adjusted.

154.86 to 156.42 While Tokyo Slept. The Bank of Japan Meets in Under Twenty-Eight Hours.

New York took USD/JPY from 154.86 to 156.42 overnight — one publisher's reading, and we say so.

The 155.00 level that took three attempts and thirty-six hours to clear is now more than a figure below the market, because the driver changed. Japan's CPI lands at 23:30 UTC and the Bank of Japan decides about three and a half hours later, with 66 of 68 economists already expecting the hike — which means the surprise risk is stacked on the side that hurts the yen.

155.00 Held on the Third Attempt. At 23:50 Tokyo Finally Gets a Japanese Number.

USD/JPY has taken 155.00 three times in thirty-six hours.

The first two were handed straight back inside the session; the third stuck — New York closed 155.10, seventy-five sen up, on a 154.21–155.24 range, with the ten-year at a nineteen-year 5.0390% and the Dow down 399. Three sessions running, every link in the yen's chain has been American. At 23:50 UTC Japan finally supplies its own numbers — trade balance, exports, imports and core machinery orders in one minute — and on the evidence of the last three sessions Tokyo will not trade a single one of them. We are putting that in writing so it can be marked.

Your Week-Ahead Table Has the Wrong Man Chairing Wednesday. Ours Had the Hours Wrong Too.

Two vendor calendars put Jerome Powell at Wednesday's FOMC press conference.

The Federal Reserve's own site names Kevin Warsh as Chairman and lists Powell separately as a sitting governor — which is exactly why a filter keyed on the name keeps matching. One table still has the Bank of Japan on hold against a survey at 97% for a hike. And our own fifty-one-hour gap between the two decisions is thirty-three. Plus an empty European calendar into the London open.

USD/JPY Breaks 154 Before the BOJ Even Meets — What a Pre-Priced Hike Does to Your System

USD/JPY traded below 154 in Tokyo hours, the yen's strongest level since late February, with a 25bp BOJ hike on 18 September already largely priced.

Here is what that leaves to trade, and why a five-month trend filter is the wrong tool this week.