After breaking to new multi-year highs on the testimony of Ben Bernanke, USD/JPY is crashing all the way towards 102 as the Nikkei makes a violent correction, falling around 6% at the time of writing. The strong correlation between yen weakness and Japanese stocks continues, and now it turns against USD/JPY. Update: the Nikkei closes 7.32% lower – the biggest crash in two years.
USD/JPY fell as low as 102.04, from the highs of 103.56 seen earlier and from the peak of 103.72 seen after Bernanke.
Also the Japanese bond market is not exactly calm. The BOJ already announced a plan to intervene in order to “calm the bond markets” and combat the leap in bond yields (JGBs).
For more, here is the USDJPY forecast, and a live chart of the wild action in USD/JPY:
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