JPY: time to spend some more ammunition?

USD/JPY continues to test above 145 ahead of the US non-farm payrolls data.
Japan’s policymakers, including Finance Minister Shun’ichi Suzuki have so far
restricted their verbal interventions to occasions on rallies in USD/JPY towards
intervention levels around 145.60/70. So far this week, the BoJ has been spared
having to intervene to due soft US economic data. The BoJ spent c.USD20bn in
its last round of intervention and, according to our estimates, has c.USD120-130bn
to spend on intervention before they have to consider selling USTs. So they have
another five or six shots if they continue intervening in USD20bn increments. A
strong US non-farm payrolls number would be a good test of whether the BoJ is
taking a ‘hold the line’ or a ‘sniper’ approach to its interventions – in other words,
will it hold USD/JPY below 146 or judiciously save its ammunition and intervene
when positioning yields maximum pain for the market?

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