The Last Yen Intervention Worked For 3 Months, This One May Have Already Failed

And Steve Mnuchin has the handwriting of a serial killer.

• Bank of Japan yen intervention on October 21, 2022, cost ¥5.6T, pushing the yen up 3.3% and lasting 3 months.

• This current yen intervention cost about the same and pushed up the yen about 3.7%, but it's already failing. If the Yen breaks through 160 again soon, the BOJ is going to look completely impotent.

• Mnuchin's $1B New York Community Bancorp balout looking shaky as Republic First fails and NYCB postpones its annual shareholder meeting.

• Why RRPs have stopped falling, fewer T-bills for sale, but they should still gradually drift lower. In the meantime, deflationary forces to intensify since no new money heading into banks.

The October 21, 2022 Bank of Japan yen intervention cost ¥5.6T according to official figures. The operation pushed the yen up 3.3% that day (see high and low highlighted below) and the rally lasted just shy of 3 months.

According to current account releases from the BOJ yesterday, according to the Japan Times, yesterday's intervention was about the same in size:

Japan likely conducted its first currency intervention since 2022 to prop up the yen on Monday, according to a Bloomberg analysis of central bank accounts.

The Bank of Japan reported Tuesday that its current account will probably fall ¥7.56 trillion ($48.2 billion) due to fiscal factors including government bond issuance and tax payments on Wednesday.

That’s much bigger than the drop of about ¥2.1 trillion that private money brokers estimated, suggesting an intervention of about ¥5.5 trillion took place.

Yesterday's intervention brought the yen up about 3.74%, so on that metric it was even more effective, but since then the yen is down 1%, and could break back through 160 today. We're already back at 159, the strongest reading yesterday being ¥154.43.

If the yen breaks back above ¥160 this week, or any time this month really, the Bank of Japan is going to look desperate and impotent. They are close to being trampled by the market, and their only ammunition is US Treasurys.