EBS Boosted by Yen Volatility

Yen volatility on the back of suspected Bank of Japan intervention Monday helped propel EBS to its biggest yen volume day since November 2016.

CME says that EBS in yen alone, executed $77 billion on Monday 29 April, and with CME trading over $39 billion in futures (excluding options) on the same day, the more-than $116 billion was the combined platforms’ busiest day since October 2022.

It was also a big day for Cboe FX, which reported daily volume in all pairs of more than $64 billion – the busiest day of the month with just month-end to come, it was the same with Euronext FX, which reported a $41.5 billion day. Notably, the largely relationship-driven 360T, did not have its busiest day of the month, activity was still heightened, however.

Although the Japanese authorities have been notably coy about discussing whether they intervened or not, market sources have told The Full FX that local Japanese banks were very active in the market ahead of, and during, the move lower, after USD/JPY breached 160 for the first time since 1990. The activity was a little unusual given it was a local holiday and the start of Golden Week, as such liquidity is much thinner than usual.

While, as noted, it would have taken less to get the market moving lower, it is probably heartening for CME that EBS appears to grab the lion’s share of the surge in yen volume, as it highlights the importance of the primary venue in delivering a policy message – which seems clearly to be the Japanese authorities’ intention.