Misunderstanding the FX market

There is some utter garbage that gets written about the financial markets.

Take this, a blog post talking about the rapid surge in the value of the Yen in very late NY on the 16th. I’m not going to link to it or credit it, garbage like this should disappear into obscurity. But first, lets look at the move.
Here is the move on a 1 minute chart:

and on a 5 minute chart, to provide a bit of context and what happened after:

Both charts from NetDania on DailyFX

Now, here is the quote:

More importantly is the near certainty that the Japanese central bank intervened as it saw its currency strengthen against the dollar by 4% in a split second.

Lets correct both errors in this quote.
1. If the BOJ intervened to buy USD/Yen it would be in their interest to publicise the fact as loudly as possible. Especially in this environment. The move occurred around 4.15pm in NY. Anyone with a basic understanding of the FX markets know this is almost the thinnest liquidity time of the day; big moves certainly don’t happen then every day, but the time is ripe for sharp moves at that time. To be fair, making the assumption that the BOJ intervened is probably an easy mistake to make for someone with little FX experience. But the next error is truly bizarre …

2. A basic, easily checked factual error. The Yen did not appreciate “4% in a split second”. Not even close. Take a look at the chart (available free on the ‘net, you don’t need a Reuters or Bloomberg terminal). The USD/Yen move of 4% to the lows took over 20 minutes (the rapid move down from 79.25, about a 2.5% move, occurred over the course of about 10 minutes). Count the bars. Pretty simple.

Amazing, basic errors. I wonder why people write such conspicuously bad market commentary that can be shown to be garbage with the easiest of fact-checking. I can’t imagine what purpose this sort of wild exaggeration serves?

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