Yesterday's Federal Reserve meeting drew considerable attention, but it was the suspected intervention by Japanese authorities that stole the spotlight. Within minutes, the Japanese yen surged over 2%, sending shockwaves through FX markets.

Seizing the opportunity presented by weaker-than-expected US macro data and a neutral Fed meeting, the Japanese Ministry of Finance (MoF) intervened in FX markets for the second time in a week. The intention behind this move appears to be twofold: to surprise speculators and render interventions more unpredictable. As a result, USD/JPY plummeted sharply from ¥157.55 to precisely ¥153, while GBP/JPY, having reached ¥200 on Monday, dipped below ¥192. This drastic fluctuation across multiple JPY crosses marked another significant event in the market.

Although the yen has already retraced a portion of its gains, both USD/JPY and GBP/USD saw nearly a 1% increase this morning. This intervention contradicts the notion of a specific threshold and suggests that the MoF and Bank of Japan are aiming to keep markets on their toes, making policy decisions more erratic and betting against the yen more challenging.