Further evidence of Chinese intervention not lost on the USD/JPY

A headline breaking a little earlier this morning, from the highly respected news agency, Reuters suggests the Beijing stock exchange is actively seeking to prevent major Chinese shareholders from selling stock. Now, I cannot confirm this is true, but the inference of this would be to underpin all that I said about China last week. The fact that the authorities there might be trying to halt a slide in the stock markets would not surprise me one bit though, as we know this is not truly a free market. That coupled with reports of Chines state banks seen actively selling the USD/CNY (and by default the USD/CNH too) would tie in with the PBOC and the government actively trying to prop up the edifice, in the wake of a shadow banking sector that is close to collapse. None of this is lost on the Japanese Yen though and leaving aside the slightly higher PPI data today, the drop in the USD/JPY looks closely tied to the USD/CNH at the moment. Ultimately it will not matter though, because the YEN/CNH rate can still detach in a more meaningful way, no matter what the PBOC does with its own currency. Leaving that aside and left to its own devices the Chinese markets are key to many others and stocks there are very much in the spotlight again this week