00:00Here's a quick look at the yen as Japan and the U.S. warned of further coordinated action in FX
00:05markets,
00:06thus after confirming their first joint intervention in 15 years to lift the Japanese currency from a near four-decade
00:13low.
00:13President Trump, for his part, earlier said the joint intervention was a signal of Washington's friendship with Tokyo.
00:20We have a good relationship with Japan. We're very strong, very, very strong financially.
00:27They are, you know, they have a weakening yen and they wanted a little bit of help.
00:31And we're always there for Japan. Japan's been very good to us, with the exception, of course, of Pearl Harbor.
00:37Mr. President, what is the U.S. getting out of that arrangement?
00:42Financial benefit. Financial benefit. It's also good for the world economy.
00:49For more, let's bring in Bloomberg Intelligence Chief Emerging Markets Ethics Strategist Stephen Chu.
00:54Stephen, will this joint intervention walk?
00:59Hello, Haas. I mean, it will work better than a solo effort, as we have seen in April and then
01:07last Thursday.
01:08And the best reference is when we look at 15 years ago, that was a coordinated effort between the G7
01:16economies.
01:17Back then, they had to weaken the yen.
01:20And the impact lasts for three weeks.
01:23It's still temporary, but at least it's better than when we are talking about days.
01:27So this time, we had a U.S.-Japan coordinated effort.
01:31And hopefully, the impact, the support to the yen can last longer than last week.
01:37And one final point is, in 2011, back then, the yen weakened by over 10% against the dollar.
01:44So this time, so far, we had about 5% rally in the yen.
01:49So there could be more room to go for the yen versus the dollar.
01:54Well, bear in mind that they have said more intervention could come.
01:57What's the implication for dollar-yen and other Asian currencies here?
02:03Right. So at least for now, the traders, they are warned.
02:08They would not open a new carry trade shorting the yen, and they might think about unwinding the carry trade.
02:16So with that in mind, that would support the yen against the dollar, briefly at least.
02:21That would support other emerging market Asian currencies, especially the Chinese yuan.
02:26One reason why Chinese authorities have been reluctant to let the yuan rally further in the recent weeks,
02:34or recent months, is because the yuan has been so strong against the yen.
02:39And the yuan basket was so strong because of a weak yen.
02:42So now, if we see a huge rally in the yen against the yuan,
02:47then that could create...
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