JPY: More intervention increasingly likely

There is an elevated risk that Japanese authorities will intervene in the FX market to
support the yen today as USD/JPY is trading a touch below 149.00 at the time of
writing – well above the previous intervention level and dangerously close to the key psychological 150.00 level.
We are not making the argument that there is a clear line in the sand at 150.00 for
Japanese authorities (the whole idea of a “line in the sand” in the current FX market
appears unrealistic), but it’s likely that allowing a move above 150.00 may well
trigger an acceleration of the JPY sell-off which is exactly what Japan is trying to
Our view is that a prolonged FX intervention campaign in Japan will keep USD/JPY
around 150.00 into year-end.

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