• Next week’s leadership challenge to PM Kan could be important as the challenger Ozawa has publicly stated his intention to intervene actively in the markets to get USD/JPY back above 90.00.
• The BoJ is consistantly having its independence undermined by the politicians and the upcoming “Sayonara Deflation” bill will further undermine the central banks independent status.
• Hedge funds have been very actively buying USD/JPY over the last few weeks but they have also been selling rallies which suggests that they are not yet overly confident that they are picking the correct entry level.
• The Japanese authorities have been trying to talk USD/JPY higher since it fell below 87.00, all to no avail. The latest feeling in the interbank market is that the BoJ/MoF will start intervening heavily at 82.00 and they will do what they have to to keep the pair above 80 Yen.