A piece in the Nikkei overnight on the BOJ and the USD/JPY
- Investors increasingly view 115 yen to the dollar as a line in the sand that the Japanese government and central bank will defend
One reason to assume that threshold is exporters. Toyota Motor, for example, has assumed an average exchange rate of 115 yen to the dollar for the latter half of fiscal 2015. Many investors believe that the government and BOJ will not allow corporate earnings, the catalyst for a positive economic cycle under Abenomics, to suffer.
- There's also the "Kuroda line" for how far the yen might weaken before the BOJ acts, which is 125 to the dollar
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A lot of traders here at ForexLive have noted the acceleration of 'jaw boning' from Japan when USD/JPY dips below 118 and 117, so this isn't new news to anyone. And the 'Kuroda line' (if it exists!) around the mid-120s is familiar to us also.
