Yen roars ahead on astronomic volatility

FXstreet.com (Barcelona) - After having had a roughly 30% upmove in the USD/JPY driven by the radical shift in monetary policies brought forward by 'Abenomics', sellers of the Yen in recent weeks continue to get burn out, with today's fall, the sharpest 1-day fall in over 3 years, exemplifying that the tide is turning. Will it last?

With the ongoing upward pressure on the Yen, has come an enormous volatility, which, as described by Adam Button at Forexlive, it might have a lot to do with correlations-based algorithm programs either breaking down, no longer activated as money is starting to get lost or going haywire. As Button says, "All three of those options sap liquidity and drive volatility", adding that "In addition, the wild moves in markets have made traders especially jumpy."

Today's 300+ slide from highs at 99.26 down to 95.60 were prompted by the disappointment that represented the stand-off in monetary policies by the Bank of Japan during yesterday's call. The central bank stood pat failing to change the maturities of fixed rate operations something that was somehow expected to ease volatility in the JGB.