Traders are blaming comments from Japan’s ruling party contained in a panel draft documnet for the sharp turnaround in USD/JPY and JPY crosses this morning. The “should try and keep FX level around 120″ comment seems far fetched but the “need drastic monetary easing to wipe out deflation” comment seems to have hit the mark. The Japanese government appears hellbent on slaying the deflation dragon and “real” quantitative easing may be in the offering. USD/JPY after trading down to 92.57 reversed savagely to 93.40ish; last at 93.25. Ditto EUR/JPY which saw a low in Asia around 125.70 before trading briefly above 127 in the melee; last at 126.85.