ING with a look backwards at USD/JPY above 140 in the 1990s:
- "The last time USD/JPY was above 140 in the late 1990s, the Japanese were intervening."
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But, what now?
- "Any sharp near-term move to the 142/143 would probably spark a much sharper verbal protest from Japanese authorities and put intervention back on the agenda"
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ING further note:
- "Shorter-dated implied option volatilities ... still around the 12% area (vs 15%+ a few months ago) suggesting investors have downscaled fears over possible Japanese FX intervention to sell USD/JPY.
- While we all acknowledge that Japanese authorities would be trying to turn back the tide here (USD/JPY is above 140 for good macro reasons) we should not discount intervention completely"
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Note - The Bank of Japan conducts intervention in the yen on instructions from the Ministry of Finance. Hence, its worthwhile having regard to MoF officials on yen movements. At ForexLive we headline these, so you can stay informed. We have had such comments from the MoF (and the BOJ and other government departments/ministers) quite often in recent months, mostly when the yen depreciates sharply. if you've been following along you'll have noted these. So far its been hot-air, just verbal 'intervention'. A sign of impending actual intervention activity in the forex market will be more strident comments from Japanese officials and more explicit threats of yen buying. We'll keep on top of these if/when they come.
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USD/JPY daily:
