The Bank of Japan checked rates with the market late on Friday, during the New York session. Four houses read that check the same way this morning, and one of them drew the cadence out far enough to name a quarter. Then we went to establish where USD/JPY actually is, so we could say how fast it had moved, and got three answers seventy-seven pips apart whose published day ranges cannot all be true at once.
Four readers, one interpretation, and it is not a level
MUFG, Societe Generale, ING and Commerzbank were all quoted on the rate check this morning, and they do not contradict each other. MUFG says the Bank “conducted a rate check during the New York trading session” and calls it a clear signal the authorities are prepared to intervene again if the yen keeps weakening. Societe Generale refers to spot rate checks by the Ministry of Finance late on Friday. Commerzbank’s Thu Lan Nguyen adds the obvious limit — that over the longer run merely threatening intervention is unlikely to be enough, and the Bank will have to back its words with action.
The one that changes what you do is ING. ING’s reading is that rate checks “may suggest that Japanese authorities are focused more on the pace of moves over a rolling x-day period than on defending a specific level”. If that is right, every line on your chart at 158.00 or 160.00 is the wrong instrument. You are not waiting for a level to be touched. You are waiting for a rate of change to be exceeded, over a window whose length nobody outside the Ministry knows.
All four of these reach us through one publisher this morning, and none of them is the Ministry of Finance. Take them as four houses agreeing, not as four independent confirmations of what the authorities are actually doing.
MUFG’s cadence points at December, not October
This desk has carried one line for seven slots without writing it up, because it rested on a single reader we had not gone back to. We have now re-read it at source. MUFG holds that the Bank’s new policy phase is “consistent with a rate hike every three months”.
Do the arithmetic out loud. The Bank raised to 1.25% on Friday 18 September. Three months from that decision lands in the second half of December. The Bank meets on 28 October and again on 17 December. A cadence of one move a quarter, anchored on 18 September, does not reach the October meeting at all — it reaches the December one. Anyone pricing an October hike off the phrase “new phase” is pricing the wrong meeting, on this house’s own framing.
Two things keep this from being a forecast. It is still one house, and a cadence is a description of a regime rather than a commitment by the Bank. And Governor Ueda’s own line runs the other way in tone: accommodative financial conditions are expected to remain in place to support growth. That is not the language of a central bank in a hurry.
Where is spot? Three answers, and their day ranges are mutually impossible
We wanted a measured move for the pace argument above. Here is what three feeds gave us inside a few minutes of each other, late in the London morning on 22 September:
- One publisher, stamped 10:52:16 GMT: 156.96, down about 0.2% on the session, with a 20-period exponential average at 156.63 and RSI at 49.57.
- One data aggregator, dated 22 September: 157.7310, up 0.3725 points, or +0.24% on the day.
- One quotation page, timestamped 18:09:36 with no timezone we could establish: 157.44, up 0.09 points (+0.06%), day’s range 157.26 – 157.45.
Now put the third one against the other two. Its published high for the day is 157.45, which excludes the aggregator’s 157.73. Its published low is 157.26, which excludes the first publisher’s 156.96. At most one of those three day ranges is correct, and we cannot tell you which. Two of the three also disagree about the sign of the day’s move.
The band is 156.96 to 157.73. Seventy-seven pips.
If the test is pace, the error bar is the test
An authority that reacts to speed rather than to a level needs a measured speed, and so does anyone trying to anticipate it. Seventy-seven pips is not a rounding difference on this pair — it is most of a quiet session’s range. A rolling-window pace test computed on the first feed and the same test computed on the second do not produce the same answer, and on a day when the question is whether the Ministry’s trigger has been approached, that is not an academic gap.
A fourth reader helps with the reference point without settling the current one. UOB has the pair rising to a high of 157.52 yesterday before closing at 157.36, up 0.32%, and puts the short-term range at 156.90 to 157.80, with strong support at 156.20 and firm resistance at 158.40 against an overbought rally and a recent 158.05 high. That is a clean, dated close, and it is the number we would anchor a pace calculation on rather than any of today’s three.
One coincidence is worth recording because it came from an unrelated method. This desk published at 06:20 UTC that today’s option board carries large yen strikes at 157.00 and 158.00 and that they read as bookends. UOB’s purely technical short-term range of 156.90 to 157.80 sits almost exactly on top of that box. Two methods that share no inputs are describing nearly the same hundred pips. That is worth more than either of them alone, and it is still not a reason to take a position inside the box.
What we will not do is pick one of the three spot prints and publish it as the level. Any inference in this article that depends on knowing spot to the pip is weaker than it reads.
The oil leg is a timeline, not a dispute
The yen’s recovery this morning was not about Japan. At 08:17 UTC one publisher had WTI quoted above $92.00 and up about 1% on the session. At roughly 11:35 UTC an aggregator had it at $89.515, down $2.86 or 3.09%, extending declines into a fifth consecutive session. Those two readings do not contradict each other — they describe a sharp intraday correction, which is exactly what the same publisher’s 10:52 headline says happened.
The driver is reported as an Iranian proposal to reopen the Strait of Hormuz within seven days of the blockade being lifted, attributed to Kyodo, with talks potentially taking place around the UN General Assembly. Alongside that: Saudi flows through Hormuz running at roughly 2.9 million barrels a day, and satellite imagery putting around 14 million barrels on supertankers at Gulf export terminals, the most since June. The dollar index had already retreated from a 52-day high at 100.67.
So the causal chain into the yen this morning runs through a shipping lane, not through the Bank of Japan. If you are holding yen risk into the New York open, the thing that moves it is a headline out of a diplomatic calendar, and it is not on yours.
What this does not tell you
It does not tell you where USD/JPY is. Three feeds gave us three answers and we have published all three rather than choosing, because choosing would manufacture a precision none of them supports.
The rate check itself reaches us through two houses this morning and neither of them is the Ministry of Finance. We did not reach the Ministry or the Bank directly, and we cannot tell you the length of the rolling window ING describes, because ING does not claim to know it either.
The every-three-months cadence is one house’s characterisation of a regime, read at source today after seven slots of carrying it second-hand. It is not a forecast, the Bank has committed to nothing of the kind, and the December arithmetic above is ours, not MUFG’s.
One oil source was discarded outright: a widely-read chart page returned WTI at $43.17 and Brent at $45.75 behind a nine-to-ten-hour delay notice, roughly half of every other reading available. Nothing in this article rests on it and we mention it only so the absence is deliberate rather than silent.
