Golden Week and the JPY liquidity hole

[Fairman]

Golden Week and the JPY liquidity hole

Japan's Golden Week, in late April to early May, brings a run of public holidays, and Chinese holidays around the same period reduce participation further. Liquidity in yen pairs can fall away sharply, and the usual daytime patterns stop working.

The problem is that the rest of the world keeps trading. News from the US or Europe arrives, and the thin Asian market over-reacts. The 2019 flash crash in USDJPY on the first trading day of January showed what an illiquid yen market can do.

Scalpers working on yen pairs in Golden Week report sudden spikes, strange gaps between ticks, and slippage that seems out of proportion to the news.

Practical step: mark the Japanese and Chinese holiday dates for the year, cut the position size on JPY pairs on those days, and avoid trading around key times when the Tokyo desks are absent.

A related example: in thin Asian conditions, headlines from the US or Europe produce moves in yen pairs that overshoot, then reverse once Tokyo desks return. Waiting for the home session to open before trusting any large move has saved a lot of stops.

What was the strangest yen move seen during a holiday period?