Reuters piles on the talk that there will be an emergency BOJ meeting next week when the Governor returns from the Jackson Hole conference.
Increasing the size of the supply of JPY loans to the market at 0.1%, presently capped at JPY 20 trln is the most likely route the BOJ will follow, the article says, as have many analysts this week.
In my view, the MOF will follow up with intervention. They’ve been threatening for some time and the sitting PM is on thin political ice, so they have little to lose from a political stand-point. From a market standpoint they could lose a lot if they are unsuccessful. (see the Swiss National Bank for details…).
Chicago specs are long 8 jpy contracts for every one they are short, according to the latest COT data, so I think intervention has a better than average chance of putting the fear of god into traders…