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Yen taking the pressure off the EUR/USD for the time being

As many so-called experts debate whether or not the BOJ intervened in the FX markets again late yesterday evening there is one thing to note about all this, on the assumption here that it was them. That is what no one on the news wires is really mentioning and it is all about ‘Reserve Management’. That is after all what central banks do with their various currency holdings. Do not forget the coupon interest the BOJ is receiving from the Fed and their holdings with the US central Bank is huge and the BOJ can choose to sell some of that at any time they like without necessarily reducing their overall holding of US treasuries by that much. There will be more to add on that in later updates, but what this fall in the USD/JPY again today has done, is to take pressure off the EUR/USD and allowed that some breathing space and time to rebound. That said, the EUR/USD is not exactly charging higher. No doubt though, the BOJ has stopped the Euro from falling to fresh 2024 lows for the time being and taken the heat out of the dollar more generally speaking. The EUR/USD is currently trading at 1.0725

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