A historic day in FX (BOJ, BOE, SNB, SARB, BCB), global tightening sends stocks lower, bitcoin surprisingly steady

Global equities are struggling as the world anticipates surging rates will trigger a much sooner and possibly severe global recession. ​ The Fed has succeeded in convincing markets that they will remain aggressive with fighting inflation and that has many expecting another 75bp rate increase in November. ​ The aftermath following the Fed was a wave of aggressive tightening by several other central banks. Most of these rate hikes around the world are not done yet which means the race to restrictive territory won’t be over until closer to the end of the year. ​

A Historic Day in FX

Japan intervenes

It appears Japan is saying ‘enough is enough’ with currency weakness, as the Ministry of Finance delivers the first currency intervention since 1998. Japan’s Top FX Diplomat Kanda confirmed the unilateral intervention in the FX market, triggering a massive 2% rally for the yen. ​ The US Treasury said they understood why the BOJ intervened in the FX market and a Treasury Official confirmed that the US did not participate in the action. ​

It will be an uphill battle for this intervention to work as the BOJ is still in easing mode. ​

FX traders will wait to see how much sales were needed for this bold action; once the market adjusted some positioning, this move is expected to be faded. ​


The British pound did not break despite a meager half-point rate increase. ​ The BOE is falling behind in the race to fight inflation and that is mainly because the economy is showing signs of contracting. The vote was three for a 75bp rate hike, five for a half-point increase, and one vote for a ¼ point raise. The door is still open for forceful rate hikes if inflation proves to be more persistent.

The pound is already near the lowest levels seen in 37 years and that is making this next wave of weakness harder to come by. ​ ​ ​ ​ ​ ​


The Swiss franc plunged after the SNB ended negative interest rates but failed to satisfy market expectations. The SNB raised its key policy rate by 75bp, to 0.50%. SNB’s Jordan noted they are willing to be in the FX market if needed.


A close vote to keep rates steady at the elevated level of 13.75% sent the Brazilian real higher as the bank signals it they won’t hesitate in raising rates again. ​ The BCB might be at the end of its tightening cycle, but it seems they are trying to convince markets they will remain on hold for a while and are not willing to consider rate cuts.

South Africa

Emerging markets will likely follow the Fed’s lead with 75 bp rate increases. ​ The South African central bank (SARB) raised rates by 75bp to 6.25%, which brings it to pre-COVID levels. Two of the MPCs wanted to deliver a full-point and that should signal to markets that the SARB is still far from done with raising rates. ​


Bitcoin is doing just fine as the global bond market selloff heats up. Recently, it seems bitcoin would be sharply lower if Wall Street sees Treasury yields skyrocket and stocks selloff, but that is not happening. Bitcoin’s bottom could be in place if throughout this market volatility it can hold the $18,000 level. ​

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Ed Moya

Ed Moya

Senior Market Analyst, The Americas at OANDA
With more than 20 years’ trading experience, Ed Moya is a senior market analyst with OANDA, producing up-to-the-minute intermarket analysis, coverage of geopolitical events, central bank policies and market reaction to corporate news. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business and Sky TV. His views are trusted by the world’s most renowned global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Breitbart, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.
Ed Moya