Volatility in the Yen has been off the scale in the last 24 hours following the Bank of Japan’s decision effectively tightening its very-easy accommodative policy, allowing long-term rate rises to lift its yield curve.
This has seen the Yen appreciate against, well everything, with a 600 pip move against USD:
Then the Euro also dropping:
And the Australian dollar not far behind:
This takes the Aussie back to the June highs, almost wiping out the 2022 gains and resetting the relationship in this cross in one fell swoop after topping out for months at the 95 level as traders awaited the response of the laggard BOJ:
There is likely to be more downside here as the RBA won’t do anything until February as it takes a long but not well-deserved holiday.